12. An orange grower has discovered a process for producing oranges that requires two inputs. The production function is Q= min{x1, 2x2}, where x1 and x2 are the amounts of inputs 1 and 2 they use. The prices of these two inputs are w1 = $8 and w2 = $3, respectively. The minimum cost of producing 140 units is therefore

1. $280
2. $630
3. $770
4. $980
5. $1330
6. None of these are correct

13. A firm minimizes cost by

1. using the bundle of inputs where the lowest isocost line touches the isoquant.
2. using a bundle comprised of the input with the lowest factor price.
3. using the bundle comprised of the input with the largest marginal product.
4. All of these are correct.

14. At Dunder-Mifflin a unit of capital costs three times as much as a unit of labor. If MPK = 10, MPL = 5, then Dunder-Mifflin

1. is minimizing costs at the current output level.
2. optimally uses more capital and less labor to raise output at current cost.
3. optimally uses less capital and more labor to raise output at current cost.
4. None of these are correct.

15. A firm that seeks to maximize its revenue is most likely to adhere to which of the following?

1. MR=MC
2. MR=0
3. MR=P
4. MR < MC
5. MR > MC

16. If we graph labor on the horizontal and capital on the vertical axes, then the steeper an isoquant is,

1. the greater is the marginal productivity of labor relative to that of capital.
2. the greater is the substitutability between capital and labor.
3. the greater is the need to keep capital and labor in fixed proportions.
4. the greater is the level of output.