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28. Suppose that F(K,L) = 2K1/4L3/4, r = l, W = 3. A) First write down the appropriate Lagrangian and use it to solve the
28. Suppose that F(K,L) = 2K1/4L3/4, r = l, W = 3. A) First write down the appropriate Lagrangian and use it to solve the following: B) What is the optimal input combination if the rm wants to produce Q = 4? C) What is the minimum cost of producing Q = 4? D) What is the numerical value of and economic interpretation of the Lagrangian multiplier of the dual of the problem you solved to answer A) and B)? E) What is the LRTC function (as a anction of Q) for this rm? 28. A) Lagrangian = wL + rK + >[Q - F(K,L)] B L = K = 2. C) C=1*2 + 3*2 = 8. D) u= 1/2 is the extra output obtained by spending $1 extra optimally. E) Solve to get K = Q/2 and L = Q/2 so that LRTC = Q/2 + 3Q/2 = 2
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