Problem
1. Demonstrate the difference between economic efficiency and technical efficiency, using isocost/isoquant analysis.
2. Draw a hypothetical isocost curve and an isoquant curve tangent to the isocost curve. Label the combination of inputs that represents an economically efficient use of resources.
a. How does a technological innovation affect your analysis?
b. How does the increase in the price of the input on the x-axis affect your analysis?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.