A Firm with the Production Function F (X1, X2, X3

question 46

Multiple Choice

A firm with the production function f (x1, x2, x3, x4) =min{x1, x2, x3, x4} faces input prices w1 = $1, w2 = $5,w3 = $5, w4 = $3 for factors 1, 2, 3, and 4. The firm must use at least 10 units of factor 2. The lowest cost at which it can produce 100 units of output is

• A) $800.
• B) $440.
• C) $1,400.
• D) $770.
• E) $400.

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Definitions:

Test-Statistic

A value calculated from sample data during a hypothesis test that is used to determine whether to reject the null hypothesis.

Two-Tail Test

A statistical test that determines the significance of a parameter by considering both ends (tails) of the distribution to test for extreme values.

Null Hypothesis

A hypothesis used in statistics that proposes no statistical significance exists in a set of given observations.

Level Of Significance

The threshold below which a p-value must fall for an effect or difference to be considered statistically significant in hypothesis testing.