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Unformatted text preview: hand. In this situation, how many labor has to be employed? 27,000= 10 2 *L L = 270 4. Suppose that the firm wants to spend exactly $1,200. What is the most efficient combination of labor and capital (L,K) ? $1200= wL + rK $1200= 10L + 20K, L=K $1200 = 30K K=40, L=40 5. Suppose that the firm spends exactly $1200 in the most efficient way possible. How much output can the firm produce? Q = K 2 L With $1200, L=40, K=40 Q= 40 2 *40 Q=64,000...
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This note was uploaded on 08/08/2011 for the course ECON 220:103 taught by Professor Clare during the Spring '11 term at Rutgers.
- Spring '11