Question
1. Suppose that a firm's production function is given by: Q=L 0.5 K 0.5 . Suppose that the wage firms must pay for their workers
1. Suppose that a firm's production function is given by: Q=L0.5K0.5. Suppose that the wage firms must pay for their workers is $32 per worker and the rental rate they must pay for their capital is $8 per unit.
a. Calculate the firm's SR production function if the firm uses 16 units of capital in the SR and calculate the firm's SR cost curve (must be as a function of Q)
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Introduction to Econometrics
Authors: James H. Stock, Mark W. Watson
3rd edition
133595420, 978-0138009007, 138009007, 978-0133486872, 133486877, 978-0133595420
