Final answer:
The student's question pertains to the impact of additional direct materials in one production department. The firm's decision between production technologies is influenced by the relative costs of labor and machinery, with a preference for technology that minimizes total cost and adjusts the labor-to-capital ratio accordingly.
Step-by-step explanation:
The student's question involves understanding how the addition of purchased direct materials in one department of a production process affects other aspects such as production cost, the production process itself, production time in subsequent departments, and the quality of the final product. When materials are added in the second department, it implies an alteration in the production process which could affect any of the areas mentioned in the options provided.
In a scenario where the cost of machines has increased, a firm would typically shift towards utilizing more labor as it becomes relatively cheaper compared to capital (machines). This is evident in the decision to opt for production technology 2 which, due to having the lowest total cost, signifies a balance that favors more labor usage and less capital investment.
Conversely, if machine hours become cheaper, a firm is likely to switch to production technology 3 which utilizes less labor and more machinery. This strategy aims to capitalize on the reduced costs associated with machinery relative to labor, thereby shifting the production process towards higher machine dependency.