Suppose pigs (P) can be fed corn-based feed (C) or soybean-based feed (S) such that the production function is P = 2C + 5S. If the price of corn feed is $2 and the price of soybean feed is $5, what is the cost-minimizing feed combination producing P = 100?
a. C = 50
b. S = 20
c. C = 25, S = 10
d. All points on the P = 100 isoquant, including those listed in a-c would cost the same.
d
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What is the effect on the price and quantity of wooden desks of a rise in the price of wood?
A) The equilibrium quantity of wooden desks increases and the equilibrium price falls. B) The equilibrium quantity of wooden desks increases and the equilibrium price rises. C) The equilibrium quantity of wooden desks decreases and the equilibrium price falls. D) The equilibrium quantity of wooden desks decreases and the equilibrium price rises.
____ are defined as costs which are incurred regardless of the alternative action chosen in a decision-making problem
a. Opportunity costs b. Marginal costs c. Relevant costs d. Sunk costs e. None of the above