a) Explain why Binful, Bernard, Freeman, Emelia and Anortiah as managers of Ohenewaa & Ama Group of Companies should choose a method of production that is technically efficient as well as economically efficient. (b) i. State the law of diminishing returns to variable proportions. Why is the law important to managers in their production decisions?
a) Explain why Binful, Bernard, Freeman, Emelia and Anortiah as managers of Ohenewaa & Ama Group of Companies should choose a method of production that is technically efficient as well as economically efficient. (b) i. State the law of diminishing returns to variable proportions. Why is the law important to managers in their production decisions?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
(a) Explain why Binful, Bernard, Freeman, Emelia and Anortiah as managers of Ohenewaa & Ama Group of Companies should choose a method of production that is technically efficient as well as economically efficient.
(b) i. State the law of diminishing returns to variable proportions.
- Why is the law important to managers in their production decisions?
Expert Solution
Step 1
a. An economically efficient method of production is the method that produces a given level of output at the lowest possible cost and also must use few inputs as possible. It is also technically efficient.
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