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A Firm's Production Function Is Q = 12x0

Question 1

Multiple Choice

A firm's production function is q = 12x0.50y0.50, where x and y are the amounts of factors x and y that the firm uses as inputs. If the firm is minimizing unit costs and if the price of factor x is 5 times the price of factor y,the ratio in which the firm will use factors x and y is closest to


A) = 0.20.
B) = 0.40.
C) = 1.
D) = 1.67.
E) = 5.

Correct Answer:

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