Question

A. Bonds that derived their value from mortgage backed securities are also known as what? Derivatives....

A. Bonds that derived their value from mortgage backed securities are also known as what? Derivatives. Treasury bonds. Private securities. Government IOU’s. B. Suppose , where L is labor and K is capital. Consider the production curve Y = 4. Which pair of inputs will produce 4 units of output for the given production function? (1, 1), (1, 1) (2, 1), (1, 2) (4, 1), (1, 4) (0, 1), (1, 0)

B. Suppose Y = 2Min{L, K, 2R} . Which combination will produce Y = 12? Will L = 6, K = 6, and R = 6 work?

True

False

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Answer #1

Bonds that derived their value from mortgage backed securities are also known as Derivatives.

If Y=4, and the production function is a cobb douglas one (LK), then following inputs will produce 4 outputs: (4, 1), (1, 4). If function is (LK)2, then these will produce 4 units: (2, 1), (1, 2). If function is 4(LK), then (1, 1), (1, 1) will give 4 units of output.

Given Y=2Min{L, K, 2R}. If L = 6, K = 6, and R = 6, then production will be: 2Min{6, 6, 12}= 12. Hence, statement is true.

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