A Competitive Firm Produces a Single Output Using Several Inputs

question 1

Multiple Choice

A competitive firm produces a single output using several inputs.The price of output rises by $3 per unit.The price of one of the inputs increases by $6 and the quantity of this input that the firm uses increases by 12 units.The prices of all other inputs stay unchanged.From the weak axiom of profit maximization we can tell that

• A)the output of the good must have increased by at least 24 units.
• B)the inputs of the other factors must have stayed constant.
• C)the output of the good must have decreased by at least 12 units.
• D)the inputs of at least one of the other factors must have decreased by at least 12 units.
• E)the inputs of at least one of the other factors must have increased by at least 12 units.

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Definitions:

Cross Section

A diagram or representation showing the internal structure of something when cut along an imaginary line.

Circular Runout

A tolerance that limits the total variation a surface can have when rotated around a central axis, ensuring roundness and smooth operation of rotating parts.

Total Runout

A composite tolerance applied to a feature which controls both its form and its orientation to a datum axis.

Datum Axis

An imaginary line or surface referenced in manufacturing or inspection of parts and assemblies to ensure coordination and correctness of dimension and tolerance specifications.