A Competitive Firm Produces a Single Output Using Several Inputs

question 24

Multiple Choice

A competitive firm produces a single output using several inputs.The price of output rises by $4 per unit.The price of one of the inputs increases by $4 and the quantity of this input that the firm uses increases by 16 units.The prices of all other inputs stay unchanged.From the weak axiom of profit maximization we can tell that

• A)the inputs of the other factors must have stayed constant.
• B)the inputs of at least one of the other factors must have decreased by at least 16 units.
• C)the output of the good must have increased by at least 16 units.
• D)the output of the good must have decreased by at least 8 units.
• E)the inputs of at least one of the other factors must have increased by at least 16 units.

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Definitions:

Transferring

The process of moving items, such as data, assets, or inventory, from one location or account to another.

Ledger Accounts

Individual records within the general ledger that show the transactions and balances for each accounting period, relating to specific assets, liabilities, equity, revenues, and expenses.

Recording

The process of documenting financial transactions in the accounting records of a business.

Journal

A detailed record where all financial transactions of a business are initially recorded before summarizing them into ledgers.