The Production Function for a Company Is , Where

question 29

Multiple Choice

The production function for a company is , where P is the amount produced given x units of labor and y units of equipment. Each unit of labor costs $900 and each unit of equipment costs $400. Assuming the goal of the company is to maximize production given a fixed budget of $40,000, what is the meaning of the Lagrange multiplier ?

• A)The additional units that can be produced if the budget is increased by $1
• B)The amount it would cost the company to produce one more unit
• C)The additional units of labor allowed if the budget is increased by $1
• D)The amount it would cost the company to obtain one additional unit of equipment

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Definitions:

Deficit Principle

The concept that suggests individuals are more motivated by their unmet needs than by desires that have already been satisfied.

Maslow's Theory

A psychological theory proposing a hierarchy of human needs that motivate behavior, starting from basic physiological needs to self-actualization.

Self-Actualization Needs

The apex of Maslow's needs pyramid, which encompasses achieving one's ultimate potential, pursuing self-realization, aiming for personal development, and experiencing life's high points.

Social Responsibility

The obligation of an entity, individual or corporate, to act for the benefit of society at large, often incorporating ethical considerations and sustainability practices into business operations.