shootingstar

They are both technologically efficient in your example. If PP2 had used 1M and 5L, than it would have been technologicvally inefficient, because there was possibility to produce the same thing using the same quantity of M but less L (PP1 in your example). Now PP2's bigger quantity of labor is compensated by no usage of mashine. But, for example, If there had been PP3, which produced with 0M and 4L, then PP2 would have been technologically inefficient. I think in CFAI 104-107 pages is good explanation.



Edited 1 time(s). Last edit at Wednesday, May 11, 2011 at 04:39AM by optiix.