1. (5 points)

(a) Suppose the marginal product of labor is 8 and the marginal product of capital is 2. If the wage rate is $4 and the price of capital is $2, then in order to minimize costs should the firm hire more workers or rent more capital? Please explain.

(b)Suppose the production function is given by Q = min{K, L}. How much output is produced when 10 units of labor and 9 units of capital are employed? Please explain.

2. (5 points)

sady to be installed, but first we need to close some apps. Styles Update now 2. (5 points) Capital A C D Oo Labor B S