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

question 52

Multiple Choice

The production function is f(x₁, x₂) = x^1/2₁x^1/2₂.If the price of factor 1 is $10 and the price of factor 2 is $15, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?

• A)x₁ = 1.50x₂.
• B)x₁ = x₂.
• C)x₁ = 15x₂.
• D)x₁ = 0.67x₂.
• E)We can't tell without knowing the price of the output.

---

Definitions:

Office Supplies

Items used in an office for daily operations, such as paper, pens, and staplers, typically classified as short-term assets.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the correct period.

January

The first month of the year in the Gregorian calendar, often associated with new beginnings and resolutions.

Biweekly Salaries

Salary payments made to employees every two weeks, often resulting in 26 pay periods in a year.