A Firm Uses 3 Factors to Produce Its Output

question 46

Multiple Choice

A firm uses 3 factors to produce its output. Its production function is f(x, y, z) = min{ , y², }. If the amount of each input is multiplied by 2, its output will be multiplied by

• A)27
• B)4
• C)8
• D) 0.40.
• E) The answer depends on the original choice of x, y, and z.

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Definitions:

Required Rate of Return

The lowest yearly percentage gain from an investment required to attract individuals or businesses to invest in a specific security or venture.