A PC manufacturer has the following product function:

q = 10K

0.5L

0.5

where q is the number of computers produced per. day, K is machine time in hours and L is labor measured

in hours.

An competing manufacturer has the following product function:

q = 10K0.6L

0.4

A) If both companies use the same amount and the same amount of capital as labor,

who then has the highest production?

B) Assume that the use of capital is limited to 9 machine hours, while the supply of labor is unlimited. Which of the companies will then have the highest

frontier productivity of labor? Explain.