Al's Production Function for Deer Is F(x1, X2)= (2x₁

question 62

Multiple Choice

Al's production function for deer is f(x1, x2) = (2x₁ + x₂) ^1/2, where x1 is the amount of plastic and x2 is the amount of wood used.If the cost of plastic is $6 per unit and the cost of wood is $1 per unit, then the cost of producing 7 deer is

• A)$147.
• B)$49.
• C)$7.
• D)$91.
• E)$21.

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Definitions:

Economic Profit

The total revenue minus the opportunity costs of all inputs, a measure that considers both explicit and implicit costs.

Profit-Maximizing Price

The price level at which a company can make the highest profit, balancing between sales volume and profit margin.

Panel

A group of individuals selected to discuss, investigate, or make decisions about a particular topic, or a longitudinal statistical study in which the same subjects are observed repeatedly over a period of time.

Long-Run Equilibrium

A state in which all factors of production and outputs are variable, leading to a situation where no economic agent has the incentive to alter their behavior.