What Combination of X and Y Will Yield the Optimum

question 67

Multiple Choice

What combination of x and y will yield the optimum for this problem? Minimize $3x + $15y, subject to (1) 2x + 4y ≤ 12 and (2) 5x + 2y ≤ 10 and (3) x, y ≥ 0.

• A) x = 2, y = 0
• B) x = 0, y = 3
• C) x = 0, y = 0
• D) x = 1, y = 5
• E) x = 0, y = 5

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Definitions:

Short Run

A period in economics where at least one factor of production is fixed and cannot be varied to influence output.

Long Run

A period during which all inputs can be adjusted by firms, as opposed to the short run where some inputs are fixed.

Aggregate Demand Curve

A curve that represents the total demand for all goods and services in an economy at various price levels, typically downward sloping.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, a measure of inflation.