The Production Function Is F(x₁, X₂)=x^1/2₁x^1/2₂

question 2

Multiple Choice

the production function is f(x₁, x₂) =x^1/2₁x^1/2₂.If the price of factor 1 is $4 and the price of factor 2 is $6, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?

• A)x₁ =x₂.
• B)x₁ = 0.67x₂.
• C)x₁ =1.50x₂.
• D)We can't tell without knowing the price of output.
• E)x₁ =6x₂.

---

Definitions:

Lending Standards

The criteria and guidelines used by financial institutions to determine the creditworthiness of prospective borrowers and to make decisions about loan applications.

Housing Prices

The amount of money required to buy homes in a particular area, which can fluctuate based on demand, location, and economic conditions.

Housing Bust

A rapid and significant decline in the housing market, characterized by falling home prices and increased foreclosures.

Regulatory Policies

Laws and rules instituted by governments to control or manage certain activities, industries, or market practices.