Question
Consider the production function f(L, K) = 2KL. The marginal products of labor and capital for this function are given by MP L =KL, MP
Consider the production function f(L, K) = 2KL. The marginal products of labor and capital for this function are given by
MPL=KL, MPK= 2/L.
Prices of inputs are w= 1 per hour of labor and r= 4 per machine hour.(
a) What is the MRTSlk of this technology?
b) What is the least costly combination of inputs that allows the firm to produce Q= 8 units of output? What would be the cost of producing these 8 units?
c) Repeat part (b) for a general Q rather than Q= 8. What is the cost of producing Q units in the least costly way?
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Economics Today The Macro View
Authors: Roger LeRoy Miller
18th Edition
0133884872, 978-0133884876
