The Production Function Is F(x₁, X₂)=x^1/2₁x^1/2₂

question 2

Multiple Choice

the production function is f(x₁, x₂) =x^1/2₁x^1/2₂.If the price of factor 1 is $4 and the price of factor 2 is $6, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?

• A)x₁ =x₂.
• B)x₁ = 0.67x₂.
• C)x₁ =1.50x₂.
• D)We can't tell without knowing the price of output.
• E)x₁ =6x₂.