A Competitive, Profit-Maximizing Firm Uses Two Inputs a and B

question 28

Multiple Choice

A competitive, profit-maximizing firm uses two inputs a and b.Its production function is F(a, b) = a1/2 +a1/2.Its output sells for $5 per unit.The price of input a is $1 per unit.If the price of output rises to $6 per unit but factor prices do not change.

• A)it will increase its purchases of factor a by 11/4 units.
• B)it will increase its purchases of factor a by 9/4 units.
• C)it will increase its purchases of factor a by 3/4 units.
• D)we need to know the price of factor b to be able to determine the change in demand for a.
• E)None of the above.

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Definitions:

Bedpan

A receptacle used for the toilet needs of a bedridden patient in a healthcare setting.

Fecal Elimination

The process of excreting waste from the digestive tract through the anus.

Auscultation

The process of listening to sounds produced within the body.

Palpation

The examination of the body using the sense of touch.