A firm can use two different production technologies, with capital and labor requirements at each level of output as follows:

                        Technology 1             Technology 2

Output             K         L                      K         L         

11                    6          1                      2          7                     

12                    7          3                      3          10                               

13                    9          5                      4          14                               

14                    12        7                      5          20                   

(a) Suppose the firm is operating in a low-wage country, where capital cost is $4 per unit and labor cost is $2 per worker. For each level of output, which technology is the cheapest? Show your work.

(b) Now suppose the firm is operating in a high-wage country, where capital cost is $2 per unit and labor cost is only $4 per worker. For each level of output, which technology is the cheapest? Show your work.

(c) Suppose the firm moves from a high-wage to a low-wage country but that its level of output remains constant at 13 units. How will its total employment change? Explain.