00:01
So here, let's start off by thinking about the concept of production efficiency before we even get into the answers, right? production efficiency is when you produce a given quantity at lowest possible cost, right? that is what production efficiency refers to.
00:19
So you want to minimize cost.
00:22
That's a fairly straightforward objective.
00:24
And you know, you might say that from a selfish perspective, of course that's what business is, want to do, but from a social perspective, that's what we should want them to do either, right? when businesses incur costs, they are consuming resources, right? we want businesses to use fewer resources to, you know, consume less oil, to burn less gas.
00:46
So producing at low as possible cost is good for the firm's profits, yes, but it's good for society that wants to minimize resource use as well.
00:54
So we have four combinations in terms of workers and machines.
01:03
And we have one involves 30 workers and 50 machines.
01:09
The other involves 20 and 20.
01:11
The other involves 30 workers and 20 machines.
01:15
And the other worker involves 20 and 50.
01:18
And we can immediately see that this is going to be production efficient.
01:27
Because both inputs are costly, right? workers are not free and machines are not free...