Suppose the firm is operating in a high-wage country where

Reference no: EM13483453

A firm can use three different production technologies, with capital and labor requirements at each level of out as follows: Technology 1:Daily Output(DO) =100,K=3,L=7;DO=150,K=3,L=10;DO=200,K=4,L=11; DO=250,K=5,L=13;Technology 2:DO=100,K=4,L=5;DO=150,K=4,L=7;DO=200,K=5,L=8; DO=250,K=6,L=10; Technology 3:DO=100,K=5,L=4;DO=150,K=5,L=5;DO=200,K=6,L=6; DO=250,K=7,L=8 A.

Suppose the firm is operating in a high-wage country, where capital cost is $100 per unit per day and labor cost is $80 per worker per day. For each level of output, which technology is cheapest B. Now suppose the firm is operating in a low-wage country, where capital cost is $100 per unit per day but labor is only $40 per unit per day. For each level of output, which technology is cheapest? C. Suppose the firm moves from a high-wage to a low-wage country but its level of output remains constant at 200 units per day. How will its total employment change?

Reference no: EM13483453

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