The table below shows combinations of workers and machines that can be used to produce 10 lawnmowers per day.

Question

Technology	Workers	Machines
A	4	8
B	5	3
C	9	2
D	3	6
E	6	4

 For the following determine which technology’s are dominated by other technology’s and which one is not

Technology A is?

Technology Bis?

etc....

Suppose that the daily wage is $5 per worker and the daily rental price per machine is $30. 

The lowest cost of technology is ?

and the technology chosen is technology ?

Now consider the case where the daily wage rises to $10.

The firm’s lowest cost technology will now be technology ?

and the cost is ?

The change in the firm’s profits per day as a result of the change in the daily wage is ?

Answer 1

The best way to answer this question is to first create an excel table extension that shows the calculated costs for both scenarios as outlined in the question.

In Scenario 1, the Daily Wage of Workers is $5 and the Machine Rental is $30.

In multiplying these cost factors times the number of workers and machines respectively, we find that Technology C is the lowest cost($105) and would be selected.

In Scenario 2, the Daily Wage of Workers increases to $10 and the Machine Rental stays at $30

We can see that in this scenario Technology B becomes the lowest cost at $140.

Lastly, the impact on profit in Scenario 2 is a decrease of $35 ($140 in Scenario 2 minus $105 in Scenario 1)