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A firm that uses two inputs to produce output has the production function 3x1/3y1/3, where x is the amount of input 1 and y is the amount of input 2. The price of output is 1 and the prices of the inputs are wx and wy. The firm is constrained by the government to use exactly 1000 units of input 1.
A. Explain how much of input 2 does it use?
B. Illustrate what is the most that it is willing to bribe an inspector to allow it to use another unit of input 1?
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