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    Intermediate Microeconomics Study Set 1
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    Exam 18: Profit Maximization-Part B
  5. Question
    The Production Function Is F(x<sub>1</sub>, X<sub>2</sub>)=x<sup>1/2</sup><sub>1</sub>x<sup>1/2</sup><sub>2</sub>
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The Production Function Is F(x1, X2)=x1/21x1/22

Question 2

Question 2

Multiple Choice

the production function is f(x1, x2) =x1/21x1/22.If the price of factor 1 is $4 and the price of factor 2 is $6, in what proportions should the firm use factors 1 and 2 if it wants to maximize profits?


A) x1 =x2.
B) x1 = 0.67x2.
C) x1 =1.50x2.
D) We can't tell without knowing the price of output.
E) x1 =6x2.

Correct Answer:

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