A Firm Makes Two Products, Y and Z

question 6

Multiple Choice

A firm makes two products, Y and Z. Each unit of Y costs $10 and sells for $40. Each unit of Z costs $5 and sells for $25. If the firm's goal were to maximize profit, what would be the appropriate objective function?

• A) Maximize profit = $40Y = $25Z
• B) Maximize profit = $40Y + $25Z
• C) Maximize profit = $30Y + $20Z
• D) Maximize profit = 0.25Y + 0.20Z
• E) Maximize profit = $50(Y + Z)

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Definitions:

Factor Supply

The total amount of various inputs (like labor, capital, and natural resources) available in the economy for production processes.

Technical Support Center

A dedicated facility or service that provides technical assistance and support to customers for various products or services.

Marginal Product of Labor

The additional output produced as a result of employing one more unit of labor, holding other inputs constant.

Equilibrium Outcome

This term describes a state in a market or game where all participants' actions are balanced, and no incentive exists to deviate from the chosen strategy.