Question
1.A widget manufacturer has the following production function: Q=2K+L. MPL=1, MPK=2 a.What is the RTS along the isoquants? RTS________ b.If the wage rate is $10
1.A widget manufacturer has the following production function: Q=2K+L. MPL=1, MPK=2
a.What is the RTS along the isoquants?
RTS________
b.If the wage rate is $10 and the rental rate on capital is $15, what is the cost minimizing combination of K and L the producer will choose to produce 10 units of output.
Capital (K)__________
Labor (L)___________
c.If the wage rate is $10 and the rental rate is $10, what is the cost minimizing combination of K and L will the producer choose to produce 10 units of output?
Capital (K)________
Labor (L)_________
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Economics of Money, Banking and Financial Markets
Authors: Frederic S. Mishkin
9th Edition
978-0321607751, 9780321599797, 321607759, 0321599799, 978-0321598905
