Question

Given below are two statements:
Statement (I): How to produce means what level of inputs to apply in production.
Statement (II): The equation $Y = f(X_1, X_2 / X_3, X_4, \dots, X_n)$ indicates that $X_1$ and $X_2$ are fixed factors, while $X_3, X_4, \dots, X_n$ are held variable at their arithmetic mean level.
In light of the above statements, choose the most appropriate answer from the options given below:

• A. Both Statement (I) and Statement (II) are correct.
• B. Both Statement (I) and Statement (II) are incorrect.
• C. Statement (I) is correct but Statement (II) is incorrect.
• D. Statement (I) is incorrect but Statement (II) is correct.

Hint:

Always remember the production function notation: $Y = f(\text{Variable Inputs} \mid \text{Fixed Inputs})$. The vertical bar or slash separates variables from parameters/fixed factors.

Answer 1

The Correct Option is B