Concerning the maximization of output subject to a cost constraint, which of the following statements (if any) are true?
a. At the optimal input combination, the slope of the isoquant must equal the slope of the isocost line.
b. The optimal solution occurs at the boundary of the feasible region of input combinations.
c. The optimal solution occurs at the point where the isoquant is tangent to the isocost lines.
d. all of the above
e. none of the above
Question 2
A solution to the budget-gaming problem is
a. Remove all kinks from the compensation schedule
b. Use a target based pay function with each target scoring greater return
c. Base compensations on meeting particular budget goals
d. All of the above
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