I. Assuming that a firm Carlo & Gary, Inc. can use three different production technologies with…

I. Assuming that a firm Carlo & Gary, Inc. can use three different production technologies with…

I. Assuming that a firm Carlo & Gary, Inc. can use three different production technologies with distinct capital and labor requirements at each level of output as follows:

Daily Output Technology 1 Technology 2 Technology 3

K L K L K L

100 3 7 4 5 5 4

150 3 10 4 7 5 5

200 4 11 5 8 6 6

250. 5 13 6 10 7 8

a. If the firm operates in the US (a high-wage country) where capital cost is $50.00 per unit and labor cost is $40.00 per worker per day, which technology is cheaper?

b. Now, suppose that the firm moves to Haiti (a low-wage country) to reduce its labor cost per unit per day by half (capital cost does not change). Which technology is cheaper?

c. After moving to Haiti, Carlo & Gary Inc. wants to maintain its level of output at 200 units per day. How will its total employment change?

d. Is it a cost saving move

I. Assuming that a firm Carlo & Gary, Inc. can use three different production technologies with…

TALK TO SUPPORT VIA LIVE CHAT TO SEE THIS ANSWER AT $ 10 ONLY