Question 1 1 pts Farmer Old MacDonald wishes to choose the most cost-effective w

Question

Question 1 1 pts Farmer Old MacDonald wishes to choose the most cost-effective way of harvesting his cauliflower crop. Old MacDonald has three choices of combinations of differin amounts of machinery and labor. The table to the right shows the three production technologies Production Number of Number of technology workers machines 10 2 2 5 If workers cost $2,000 to hire for the harvest season, and harvesting machines cost $4,000, which of the production technologies would Farmer Old MacDonald choose to minimize his costs? [Select ] If workers' wages increase to $3,000 per season, and the cost of machines stayed the same, which option would the farmer choose? Select ]

Explanation / Answer

1.

Table

Technology

Calculation of cost

Total cost

1

$2,000 × 10 + $4,000 × 2 =

$28,000

2

$2,000 × 6 + $4,000 × 3 =

$24,000 (minimum)

3

$2,000 × 3 + $4,000 × 5 =

$26,000

Technology-2 should be chosen because of minimum cost.

Table

Technology

Calculation of cost

Total cost

1

$3,000 × 10 + $4,000 × 2 =

$38,000

2

$3,000 × 6 + $4,000 × 3 =

$30,000

3

$3,000 × 3 + $4,000 × 5 =

$29,000 (minimum)

Technology-3 should be chosen because of minimum cost.

Technology

Calculation of cost

Total cost

1

$2,000 × 10 + $4,000 × 2 =

$28,000

2

$2,000 × 6 + $4,000 × 3 =

$24,000 (minimum)

3

$2,000 × 3 + $4,000 × 5 =

$26,000

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