Economics: Principles, Problems, and Policies, 19th Edition

Published by McGraw-Hill Education
ISBN 10: 0073511447
ISBN 13: 978-0-07351-144-3

Chapter 2 - The Market System and the Circular Flow - Problems - Page 44: 1d

Answer

No

Work Step by Step

Using one unit of each of the four resources would cost $9$. You would make 3 bars for $9$ while the current cheapest option is 5 bars for $13$. Making 3 bars for 9 dollars can be reduced to 3 dollars a bar. Making 5 bars for 13 dollars can be reduced to 13/5 dollars a bar, or $2.60$, which is less than 3. Therefore, Technique 2 for 5 bars is still preferable to one of each unit for 3 bars and firms will not prefer the new technique.
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