Course: Introduction to Microeconomics Topic: Production Function Suppose that for an individual capital (K) and Labor (L) are PERFECT SUBSTITUTES, so that Q = 5(K + L). If w = 2.5 and r = 5, firm (only one alternative is correct): (a) will buy 25% of all labor (L) and no capital (K). b) will buy twice as much labor (L) as capital (K) c) will buy all the capital (K) and no labor (L) d) will buy equally as much labor (L) as capital (K) e) it will buy all labor (L) and no capital (K) f) will buy twice as much capital (K) as labor (L)

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