A Firm Using Two Inputs,X and Y,is Using Them in the Most

question 21

Multiple Choice

A firm using two inputs,X and Y,is using them in the most efficient manner when

• A)MPx = MPy.
• B)Px = Py and MPx = MPy.
• C)MPx/Py = MPy/Px.
• D)MPx/MPy = Px/Py.

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Definitions:

Constraint

A limitation or restriction on the variables of a problem, often seen in economics as budget constraints affecting consumer choices.

Utility Function

A mathematical model that describes how a person ranks choices based on perceived utility, happiness, or satisfaction.

Consumption

The act of using goods and services by households or individuals, leading to the satisfaction of needs and wants.

Price

The price in terms of cash expected, necessary, or donated in exchange for a commodity.