The Table Gives Marginal Product Data for Resources a and B

question 248

Multiple Choice

The table gives marginal product data for resources a and b. The output of these independent resources sells in a purely competitive market at $1 per unit. Assuming the prices of resources a and b are $10 and $20 respectively, what is the profit-maximizing combination of resources?

• A)6 of a and 3 of b
• B)3 of a and 6 of b
• C)5 of a and 4 of b
• D)4 of a and 5 of b

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Definitions:

Liability Case

A legal case involving the determination of someone's responsibility for damages or losses incurred by another party.

Coinsurance Clause

A provision in an insurance policy that requires the policyholder to bear a portion of the losses to the extent specified in the policy.

Fair Market Value

The price that a knowledgeable, willing, and unpressured buyer would pay to a knowledgeable, willing, and unpressured seller in the market.

Insurance Proceeds

The money received from an insurance claim, which compensates for a loss or damage.