a. b. C. Write firm's long run cost function. Calculate the slope of isocost line. Calculate marginal rate of technical substitution. d. Suppose firm decides to produce 50 units, what is the cost minimizing combination of these two resources (labor and capital)?

Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
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Chapter7: Production And Cost In The Firm
Section7.A: Appendix: A Closer Look At Production And Cost
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4) Suppose that a firm's production function is Q = Lº.4K0.6. The cost of a unit of
labor is $8 and the cost of a unit of capital is $12.
Write firm's long run cost function.
Calculate the slope of isocost line.
Calculate marginal rate of technical substitution.
d. Suppose firm decides to produce 50 units, what is the cost minimizing
combination of these two resources (labor and capital)?
a.
b.
C.
Transcribed Image Text:4) Suppose that a firm's production function is Q = Lº.4K0.6. The cost of a unit of labor is $8 and the cost of a unit of capital is $12. Write firm's long run cost function. Calculate the slope of isocost line. Calculate marginal rate of technical substitution. d. Suppose firm decides to produce 50 units, what is the cost minimizing combination of these two resources (labor and capital)? a. b. C.
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