Consider the Following Production Function for a Firm Using Two

question 94

Multiple Choice

Consider the following production function for a firm using two inputs x and y,
Q=20x+14y- 2x²+2xy- y² where q denotes the quantity of output that is produced. The marginal (physical) product of x is:

• A)20+14y- 2x+2y.
• B)20+14y- 2x²+2xy.
• C)20- 4x+2y.
• D)20- 2x+2xy.

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Definitions:

Theory of Liquidity Preference

A theory suggesting that individuals prefer to have their resources in liquid forms and how that preference influences interest rates.

Interest Rates

The cost of borrowing money, expressed as a percentage of the amount borrowed, paid by the borrower to the lender for using their money.

Automatic Stabilizers

Economic policies and programs designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers.

Recessions

Times of short-term economic downturn characterized by decreased trade and industrial output, typically marked by a reduction in Gross Domestic Product (GDP) over two consecutive quarters.