Suppose pigs (P)can be fed corn-based feed (C)or soybean-based feed (S)such that the production function is P = 2C + 5S.The expansion path depends
A)on the price of corn-based feed only.
B)on the price of soybean-based feed only.
C)on neither the price of corn-based or soybean-based feed.
D)on whether the price of corn-based feed is greater than or less than 2/5 the price of soybean-based feed.

Question

Quizplus · Accepted Answer

The expansion path depends on the relative prices of corn-based and soybean-based feed. If the price of corn-based feed is less than 2/5 the price of soybean-based feed, then it will be more efficient to use corn-based feed. If the price of corn-based feed is greater than 2/5 the price of soybean-based feed, then it will be more efficient to use soybean-based feed. Therefore, the best choice depends on the prices of the two feeds.

Suppose Pigs (P)can Be Fed Corn-Based Feed (C)or Soybean-Based Feed