2-8 ( Key Question ) With current engineering. say a house is bring forthing 400 loaves of banana bread daily. Besides. presume that the least-cost combination of resources in bring forthing those loaves is 5 units of labour. 7 units of land. 2 units of capital. and 1 unit of entrepreneurial ability. merchandising at monetary values of \$ 40. \$ 60. \$ 60. and \$ 20. severally. If the house can sell these 400 units at \$ 2 per unit. will it go on to bring forth banana bread? If this firm’s state of affairs is typical for the other shapers of banana staff of life. will resources flux to or off from this bakeshop good?

Entire Profits = Total Cost – Total Revenue
Entire Cost = Presource * Qresource and Total Revenue = Price * Qsold
Entire Cost = ( \$ 40 * 5 units of labour ) + ( \$ 60 * 7 units of land ) + ( \$ 60 * 2 units of capital ) + ( \$ 20 * 1 unit of entrepreneurial ability ) = \$ 200 + \$ 420 + \$ 120 + \$ 20 = \$ 760.
Entire Revenue = \$ 2 * 400 loaves of banana staff of life = \$ 800.
Entire Profits = \$ 800 – \$ 760 = \$ 40. The house will go on to bring forth as it is gaining economic net incomes. If this house is typical of the banana staff of life industry. more resources will flux toward banana staff of life as other possible houses are attracted to the economic net incomes in the industry. 2-9 ( Key Question ) Assume that a concern house finds that its net income it greatest when it produces \$ 40 worth of merchandise A. Suppose besides that each of the three techniques shown in the tabular array on page 43 will bring forth the coveted end product.

Resource Unit of measurements Required

Resource
Price per unit
of resource
Technique
1
Technique
2
Technique
3

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