Irma's Production Function Is F(x1, X2) =

question 40

Multiple Choice

Irma's production function is f(x1, x2) = . If the price of factor 1 is w1 = $3 and the price of factor 2 is w2 = $4, then her supply function is given by the equation

• A) S(p) = p(min{w1, 2w2})2.
• B) S(p) =.
• C) S(p) = p(max{w1, 2w2})2.
• D) S(p) = 5p.
• E) S(p) = min{3p, 8p}.

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Definitions:

Cash Expenses

Outlays of cash during a given period for direct charges such as wages, rent, and utilities.

Net Present Value (NPV)

The gap between the current value of cash entering and the current value of cash exiting over a timeframe, employed in investment planning to evaluate the profitability of projects.

Capital Cost Allowance (CCA)

Depreciation for tax purposes, not necessarily the same as depreciation under International Financial Reporting Standards; depreciation method under Canadian tax law allowing for the accelerated write-off of property under various classifications.