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The Production Function Is F(x1, X2) = 1

Question 21

Multiple Choice

The production function is f(x1, x2) = The production function is f(x<sub>1</sub>, x<sub>2</sub>) = <sub>1</sub> <sub> </sub> <sub>2</sub>. 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) x<sub>1</sub> = 1.50x<sub>2</sub>. B) x<sub>1</sub> = x<sub>2</sub>. C) x<sub>1</sub> = 15x<sub>2</sub>. D) x<sub>1</sub> = 0.67x<sub>2</sub>. E) We can't tell without knowing the price of the output. 1
The production function is f(x<sub>1</sub>, x<sub>2</sub>) = <sub>1</sub> <sub> </sub> <sub>2</sub>. 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) x<sub>1</sub> = 1.50x<sub>2</sub>. B) x<sub>1</sub> = x<sub>2</sub>. C) x<sub>1</sub> = 15x<sub>2</sub>. D) x<sub>1</sub> = 0.67x<sub>2</sub>. E) We can't tell without knowing the price of the output. 2. 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.

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