A Firm Uses 3 Factors to Produce Its Output

question 15

Multiple Choice

A firm uses 3 factors to produce its output.Its production function is f(x, y, z) = min{x³/y, y², (z⁴ - x⁴) /y²}.If the amount of each input is multiplied by 2, its output will be multiplied by

• A)2.
• 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:

Marginal Cost

The leap in all-encompassing expenses associated with the production of an additional unit of a product or service.

Average Total Cost

The cost of producing everything, when divided by the number of units made, signifies the cost for each unit produced.

Average Variable Costs

The total variable costs of production divided by the quantity of output produced, representing the variable costs per unit of output.

Mud Statues

Sculptures made from mud or clay, often created as part of artistic or cultural traditions.