Suppose That a Firm Uses Only Two Inputs in Its

question 47

Multiple Choice

Suppose that a firm uses only two inputs in its production process. The ratio of the marginal products of these inputs always exceeds the ratio of the prices of the inputs. What can you say about the cost-minimizing point of the firm?

• A)It is an interior solution.
• B)A cost-minimizing point must not exist.
• C)If a cost-minimizing point exists, it must be at a corner.
• D)Costs must be negative at the cost-minimizing point.

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Definitions:

Manufacturer's Negligence

Occurs when a manufacturer fails to meet a duty of care owed, leading to a defective product that causes harm.

Fiduciary Duty

A legal obligation to act in the best interest of another party, typically involving a relationship of trust, such as between a trustee and the beneficiaries of the trust.

Financial Risk

The possibility of losing financial capital due to market fluctuations, operational failures, or other external events.

Real Estate Development

The process of purchasing land, financing real estate deals, building or having builders construct projects, and ultimately selling the developed property.