Suppose That Nadine Has a Production Function 5x₁ + X₂

question 16

Multiple Choice

Suppose that Nadine has a production function 5x₁ + x₂.If the factor prices are $10 for factor 1 and $3 for factor 2, how much will it cost her to produce 70 units of output?

• A)$1,960
• B)$3,710
• C)$140
• D)$210
• E)$175

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Definitions:

Firm

Another term for a business or company, often used in legal contexts.

Times Interest Earned Ratio

A financial metric used to determine a company's ability to meet its debt obligations, calculated by dividing earnings before interest and taxes (EBIT) by interest expense.

Operating Income

Earnings from a company's core business operations, excluding incomes from investments and other non-operational sources.

Debt Obligation

A commitment by an individual or organization to repay borrowed money, typically featuring terms for repayment schedules and interest.