A Competitive Firm with Output Y Has a Production Function

question 12

Multiple Choice

A competitive firm with output y has a production function y = , where x1 and x2 are inputs used in production. The firm produces the output minimizing cost. With input prices w1 and w2, which of the following is true?

• A) The firm has L-shaped isoquants.
• B) The firm must use the cheaper input.
• C) The firm must use only input x₁ if w₁ < 2w₂.
• D) The technology has increasing returns to scale.
• E) More than one of the above is true.

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Definitions:

System Measurement

A framework or standard for quantifying or evaluating the performance, characteristics, or quality of a system.

Data Analysis

The process of systematically applying statistical or logical techniques to describe and illustrate, condense and recap, and evaluate data.

System Modeling

The process of creating abstract models of complex systems to analyze and understand their behavior.

Brown Tree Frogs

A species of frog known for its distinctive brown color and ability to thrive in a variety of habitats, including urban areas.