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

question 36

Multiple Choice

The production function is f(x₁, x₂) = x^1/2₁x^1/2₂.If the price of factor 1 is $12 and the price of factor 2 is $24, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?

• A)x₁ = x₂.
• B)x₁ = 0.50x₂.
• C)x₁ = 2x₂.
• D)x₁ =24x₂.
• E)We can't tell without knowing the price of the output.

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Definitions:

Highly Vascular

Refers to tissues or organs with a high density of blood vessels, facilitating efficient blood flow and nutrient delivery.

Heals Well

Refers to the capacity of an organism, especially human skin and tissues, to recover from injuries or wounds effectively.

Scar

A mark left on the skin or within body tissue where a wound, burn, or sore has not healed completely and fibrous connective tissue has developed.

Granulation Tissue

The new vascular tissue formed in the healing of wounds, characterized by red, granular appearance due to the proliferation of capillaries.