An Orange Grower Has Discovered a Process for Producing Oranges

question 26

Multiple Choice

An orange grower has discovered a process for producing oranges that requires two inputs.The production function is Q = min{2x1, x2}, where x1 andx2 are the amounts of inputs 1 and 2 that he uses.The prices of these two inputs are w1 = $5 and w2 = $2,respectively.The minimum cost of producing 140 units is therefore

• A)$980.
• B)$630.
• C)$1,400.
• D)$280.
• E)$700.

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Definitions:

Deferred Tax Asset

An asset on the balance sheet representing taxes paid or carried forward but not yet realized. This can arise due to timing differences between the recognition of income and expenses for financial reporting and tax purposes.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government in a specific tax year.

Warranty Expenses

Costs associated with the obligation to repair or replace products that fail to meet specified standards.

Interperiod Tax Allocation

The process of distributing the tax effects of transactions over various accounting periods.