An orange grower has discovered a process for producing oranges that requires two inputs.The production function is Q =min{2x1, x2}, where x1 and x2 are the amounts of inputs 1 and 2 that he uses.The prices of these two inputs are w1 =$5 and w2 = $10, respectively.The minimum cost of producing 160 units is therefore
A)$2,000.
B)$2,400.
C)$800.
D)$8,000.
E)$1,600.

Question

Quizplus · Accepted Answer

To produce 160 units, the grower needs 80 units of each input. The total cost is therefore 80 * $5 + 80 * $10 = $800.

An Orange Grower Has Discovered a Process for Producing Oranges