The Production Function of a Competitive Firm Is Described by the Equation

question 2

Multiple Choice

The production function of a competitive firm is described by the equation y = 8x^1/2 1x^1/2 2.The factor prices are p1 = $1 and p2 =$4 and the firm can hire as much of either factor it wants at these prices.The firm's marginal cost is

• A)constant and equal to .50.
• B)constant and equal to 3.
• C)increasing.
• D)decreasing.
• E)None of the above.

---

Definitions:

Diversification

An investment strategy that involves spreading out investments across various assets to reduce risk.

Investment Styles

Various approaches or strategies investors implement to allocate assets across different sectors or securities.

"Passed Through"

A process in which financial benefits or obligations are transferred from one party to another, often used in the context of mortgage-backed securities.

Unit Investment Trusts

Fixed portfolios of stocks, bonds, or other securities assembled by a sponsor, which are then sold in shares to investors, offering a fixed return over the trust's lifespan.