Answer the Question on the Basis of the Following Marginal

question 101

Multiple Choice

Answer the question on the basis of the following marginal product data for resources a and b.The output of these independent resources sells in a purely competitive market at $1 per unit. $\begin{array}{ccc}\begin{array}{ccc}\text { Inputs } \\\text { of a } & & \mathrm{MP}_{\mathrm{a}} \\\hline1 & & 25 \\2 & & 20 \\3 & & 15 \\4 & & 10 \\5 & & 5 \\6 & & 2 \\7 & & 1\end{array}\begin{array}{c}\begin{array}{c}\text { Inputs } \\\text { of } b\end{array} & & M P_{b} \\\hline1 & & 40 \\2 & & 36 \\3 & & 32 \\4 & & 24 \\5 & & 20 \\6 & & 16 \\7 & & 8\end{array}\end{array}$ Refer to the given data.Assuming the prices of resources a and b are $5 and $8 respectively,what is the profit-maximizing combination of resources?

• A) 7 of a and 7 of b.
• B) 6 of a and 4 of b.
• C) 5 of a and 7 of b.
• D) 4 of a and 4 of b.

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