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1 ) Suppose that you have the following technology for producing output. Q= K*1/2L*1/2 The price of labor is $7 per hour and capital costs

1

) Suppose that you have the following technology for producing output.

Q= K*1/2L*1/2

The price of labor is $7 per hour and capital costs $150 per unit. You are currently using 64 units of capital. You need to produce 100 units of output.

a) Calculate your optimal choice for labor in the short run? What is the marginal product of labor?

b) Calculate your total cost of production.

c) Calculate your average (unit) cost.

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