Consider the Following Production Function for a Firm Using Two

question 36

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. An increase in the quantity of y:

• A)is ambiguous in terms of the effect it has on the marginal product of x.
• B)does nothing to the marginal product of x.
• C)increases the marginal product of x.
• D)decreases the marginal product of x.

---

Definitions:

CAPM

The Capital Asset Pricing Model, a finance theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.

International Stocks

Shares of companies located outside the investor's home country, offering a way to diversify investment portfolios across global markets.

Consumption Baskets

A collection of goods and services used to represent what is consumed by a typical household, employed in calculating the cost of living and inflation.

Future Rate

The anticipated interest rate or exchange rate of a financial instrument at a future point in time.