Consider the Production Problem: Find the Shadow Price for Resource

question 187

Multiple Choice

Consider the production problem: Find the shadow price for resource 2. Identify the binding and nonbinding constraints.

• A) The shadow price for resource 2 is $60 .Constraints 1, 2 and 3 are binding constraints.
• B) The shadow price for resource 2 is $0.1 .Constraints 1 and 2 are binding constraints and constraint 3 is nonbinding.
• C) The shadow price for resource 2 is $60 .Constraints 1 and 3 are nonbinding constraints and constraint 2 is binding.
• D) The shadow price for resource 2 is $0.1 .Constraint 1 is binding constraint and constraints 2 and 3 are nonbinding.

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Definitions:

Standard Normal

A normal distribution with a mean of zero and a standard deviation of one, widely used in statistical analysis.

Random Variable

A variable whose numerical values stem from unpredictable phenomena.

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