A Firm Makes Two Products, Y and Z

question 55

Multiple Choice

A firm makes two products, Y and Z. Each unit of Y costs $10 and sells for $40. Each unit of Z costs $5 and sells for $25. If the firm's goal were to maximize profit, the appropriate objective function would be

• A) maximize $40Y = $25Z.
• B) maximize $40Y + $25Z.
• C) maximize $30Y + $20Z.
• D) maximize 0.25Y + 0.20Z.
• E) maximize $20Y + $50Z.

---

Definitions:

Junk Bonds

High-risk, high-yield bonds issued by companies with lower credit ratings, reflecting a greater risk of default but offering higher returns to compensate investors.

Real Estate Prices

The amount of money required to purchase ownership or rental rights to land and buildings.

Bank Interest Rates

The percentage charged on loans or paid on savings by banks to customers.

Short-Term Business Loans

Loans provided to businesses for immediate operational needs with repayment terms typically less than one year.