Suppose the Production Function for Coffee (C)is C = Min(B,W),where

question 36

Multiple Choice

Suppose the production function for coffee (C) is C = min(B,W) ,where B = beans in pounds and W = water in gallons. Suppose the price of water is $.10 per gallon and the price of beans is $10 per pound.The expansion path

• A)depends on the price of beans only.
• B)depends on the price of water only
• C)depends on the price of neither beans nor water.
• D)depends of the costs of both beans and water.

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Definitions:

Resources

Inputs used in the production of goods and services, including labor, capital, land, and technology.

New Capital

Funds or equity obtained by a company for the purpose of furthering its business objectives, or the addition of assets.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.

Economic Growth

Refers to an increase in a country's output of goods and services over time, typically measured by GDP.