The Table Gives Marginal Product Data for Resources a and B

question 272

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, when the firm hires the profit-maximizing combination of resources, its economic profit will be

• A)$140.
• B)$222.
• C)$117.
• D)$82.

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Definitions:

Chocolate Milk

A flavored milk beverage made by mixing cocoa, sugar, and milk, often consumed as a sweet treat or post-workout recovery drink.

Cookies

Small pieces of data sent from a website and stored on a user's computer by the user's web browser while the user is browsing, or a sweet baked treat.

Substitution Effects

The substitution effect occurs when consumers replace more expensive items with less costly alternatives as prices rise.

Income Effect

The change in an individual's consumption resulting from a change in their income.