A Competitive Firm with Output Y Has a Production Function

question 11

Multiple Choice

A competitive firm with output y has a production function y = (2x₁ + x₂) ^1/2, where x1 and x2 are inputs used in production.The firm produces the output minimizing cost.With input prices w1 and w2, which of the following is true?

• A)The firm has L-shaped isoquants.
• B)The firm must use the cheaper input.
• C)The firm must use only input x₁ if w₁ < 2w₂.
• D)The technology has increasing returns to scale.
• E)More than one of the above is true.

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Definitions:

Mirror Neuron Activity

Neural activity observed in certain brain regions that activate both when an individual performs an action and when they observe the same action performed by another.

Conscious Reflection

Deliberate thought or meditation on one's own actions, feelings, or thoughts.

Yawn

A reflex consisting of the simultaneous inhalation of air and the stretching of the eardrums, often triggered by tiredness, stress, or boredom.

Mirror Neurons

Neurons that activate both when an individual performs an action and when they observe the same action performed by another, thought to be fundamental to learning and empathy.