What are the two primary factors that influence a firm manager's choice between a labor-intensive and a capital-intensive method of production? How does each factor influence the manager's choice
What will be an ideal response?
The two primary factors are the technology of the production process and the prices of the inputs of production. The technology determines the marginal productivity of the different inputs that can be used in the production process. Combining information on the marginal productivities with the respective prices of the inputs tells the manager how much output is produced per dollar spent on each input. With this information, the manager can then select the combination of inputs that yields a given level of output at least cost.
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Exponential growth implies that:
A) relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growing. B) growth rates will alternate between positive and negative values in every consecutive time period. C) relatively small differences in growth rates translates into large differences in the level of a quantity after many years of growing. D) growth rates can only be positive.
The lag between changes in the Fed's interest rate target and large responses of output means that the Fed may want to ________ interest rates ________ output recovers to its natural level
A) raise, after B) lower, before C) raise, before D) lower, after