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1. Suppose computers are produced using workers and machines as perfect complements. The production function for producing computers is: F(K, L) = min(2K, 3_) (a)
1. Suppose computers are produced using workers and machines as perfect complements. The production function for producing computers is: F(K, L) = min(2K, 3_) (a) Suppose the computer manufacturer can freely choose capital (K) and labor (L). Setup the long run cost minimization problem. (4 points) (b) Solve for the long run optimal amount of capital K"(w. r, q) and labor L'(w, r, q), and the long run minimized cost C*(w, r, q). (8 points) (c) Would you expect the short run cost to be higher or lower than the long run cost? Why? Explain in 1-2 sentences. (4 points)
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