A Firm Has the Production Function Q = X^1/2₁X₂

question 15

Multiple Choice

A firm has the production function Q = X^1/2₁X₂.In the short run it must use exactly 35 units of factor 2.The price of factor 1 is $105 per unit and the price of factor 2 is $3 per unit.The firm's short-run marginal cost function is

• A)MC(Q)=105Q^-1/2.
• B)MC(Q)= 6Q/35.
• C)MC(Q)= 105 + 105Q2.
• D)MC(Q)= 3Q.
• E)MC(Q)= 35Q^-1/2.

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Definitions:

Addition Law

A probability law used to compute the probability of the union of two events. It is P(A ∙ B) = P(A) + P(B) − P(A ∩ B). For mutually exclusive events, P(A ∩ B) = 0; in this case the addition law reduces to P(A ∙ B) = P(A) + P(B).

Probability

The evaluation of how likely it is for an event to happen.

Independent Events

Two or more events where the occurrence of one does not affect the probability of the others occurring.

Conditional Probability

The probability of an event given that another event already occurred. The conditional probability of A given B is P(A ∣ B) = P(A ∩ B)/P(B).