Question
The table below contains information on three techniques for producing $15 worth of bar soap. Assume that we specified $22.50 worth of bar soap; because
The table below contains information on three techniques for producing $15 worth of bar soap. Assume that we specified "$22.50 worth of bar soap"; because soap costs $4.50 per bar and all three techniques produce 5 bars of soap ($22.50 = $4.50 per bar 5 bars). So you know each technique produces 5 bars of soap.
Units of Resource | |||||||
Resource | Price per Unit | Technique 1 Units | Technique 1 Cost | Technique 2 Units | Technique 2 Cost | Technique 3 Units | Technique 3 Cost |
Labor | $2 | 4 | $8 | 2 | $4 | 1 | $2 |
Land | 1 | 1 | 1 | 3 | 3 | 4 | 4 |
Capital | 3 | 1 | 3 | 1 | 3 | 2 | 6 |
Entrepreneurial ability | 3 | 1 | 3 | 1 | 3 | 1 | 3 |
Total cost of $15 worth of bar soap | $15 | $13 | $15 |
If the resource prices return to their original levels (the ones shown in the table), but a new technique is invented that can produce 2 bars of soap using 1 unit of each of the four resources, will firms prefer the new technique?
Group of answer choices
Yes
No
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