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Refer to the Information Provided in Table 8 -Refer to Table 8

Question 30

Multiple Choice

Refer to the information provided in Table 8.1 below to answer the question(s) that follow.
Table 8.1  Produce  Using  Techniques  Units of Variable  K  Inputs  L  1 unit of output  A 88 B 412 2 units of output  A 1412 B 8203 units of output  A 1612 B 1222\begin{array} { l c c c } \text { Produce } & \begin{array} { c } \text { Using } \\\text { Techniques }\end{array} & \begin{array} { c } \text { Units of Variable } \\\text { K }\end{array} & \begin{array} { c } \text { Inputs } \\\text { L }\end{array} \\\hline \text { 1 unit of output } & & & \\& \text { A } & 8 & 8 \\& \text { B } & 4 & 12 \\\text { 2 units of output } & & & \\& \text { A } & 14 & 12 \\& \text { B } & 8 & 20 \\3 \text { units of output } & & & \\& \text { A } & 16 & 12 \\& \text { B } & 12 & 22 \\\hline\end{array}
-Refer to Table 8.1. Assuming the price of labor (L) is $5 per unit and the price of capital (K) is $10 per unit, which of the following statements is true?


A) The firm will use production technique A to produce all three units of output.
B) The firm will use production technique B to produce all three units of output.
C) The firm will use production technique B to produce the first two units of output and production technique A to produce the third unit of output.
D) The firm will use production technique A to produce the first unit and production technique B to produce the second and third units of output.

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