Consider the production function of widget: Q = 28K0.8 L0.4, where Q is units of output per month. K is hours of capital and L is hours of labour. Capital can be rented at $60 per hour and labour can be hired at $22 per hour. What is the maximum level of output for a monthly production budget of $20000? Answer: ______________ units.
Consider the production function of widget: Q = 28K0.8 L0.4, where Q is units of output per month. K is hours of capital and L is hours of labour. Capital can be rented at $60 per hour and labour can be hired at $22 per hour. What is the maximum level of output for a monthly production budget of $20000? Answer: ______________ units.
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.2P
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32. Consider the production function of widget: Q = 28K0.8 L0.4, where Q is units of output per month. K is hours of capital and L is hours of labour. Capital can be rented at $60 per hour and labour can be hired at $22 per hour. What is the maximum level of output for a monthly production budget of $20000? Answer: ______________ units.
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