Consider the following table: $ \quad$ $ \quad$ $ \quad$$\text { Six Methods of Production of Shirts for }$
$ \quad$ $ \quad$ $ \quad$ $ \quad$$\text { the Simply Cotton Shirt Company }$
$\begin{array} { | l | l | l | l | l | l | l | }
\hline \text { Method } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\hline \text { Units of Capital } & 10 & 15 & 25 & 40 & 58 & 80 \
\hline \text { Units of Labour } & 80 & 58 & 40 & 25 & 15 & 10 \
\hline
\end{array}$ If the price of capital is $1 per unit and the price of labour is $2 per unit,the method that maximizes Simply Cotton's productive efficiency is:
A)F
B)A
C)E
D)E or D
E)B

Question

Consider the following table:  $ \quad$ $ \quad$ $ \quad$$\text { Six Methods of Production of Shirts for }$
 $ \quad$ $ \quad$ $ \quad$ $ \quad$$\text { the Simply Cotton Shirt Company }$
$\begin{array} { | l | l | l | l | l |  l  | l | } 
\hline \text { Method } & \text { A } & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \
\hline \text { Units of Capital } & 10 & 15 & 25 & 40 & 58 & 80 \
\hline \text { Units of Labour } & 80 & 58 & 40 & 25 & 15 & 10 \
\hline
\end{array}$ If the price of capital is $1 per unit and the price of labour is $2 per unit,the method that maximizes Simply Cotton's productive efficiency is:
A)F
B)A
C)E
D)E or D
E)B

Quizplus · Accepted Answer

To determine the most efficient method of production, we need to calculate the cost of each unit of production for each method. We can do this by multiplying the units of capital and labor for each method by the respective prices of capital and labor and adding the products together.

Method A: (10 x $1) + (80 x $2) = $170
Method B: (15 x $1) + (58 x $2) = $189
Method C: (25 x $1) + (40 x $2) = $105
Method D: (40 x $1) + (25 x $2) = $90
Method E: (58 x $1) + (15 x $2) = $88
Method F: (80 x $1) + (10 x $2) = $100

Thus, Method E has the lowest cost of production per unit and is the most efficient method. Therefore, the answer is C.

Consider the Following Table \quad \quad \quad Six Methods of Production of Shirts for \text { Six Methods of Production of Shirts for } Six Methods of Production of Shirts for

Consider the Following Table $\quad$ $\quad$ $\quad$ $\text { Six Methods of Production of Shirts for }$