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Quiz3 - way possible How much does the firm spend c Suppose...

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RUTGERS UNIVERSITY Department of Economics Intermediate Microeconomics Analysis Fall 2009 Instructor: Mriduchhanda Paul Quiz 3 Use the following information for the following problems. Suppose that a firm’s production function is given by 2 Q K L = . Further suppose that $10 w = and $20 r = . Show your work to get full credit. a. Suppose the firm wants to produce 27,000 units of output. What is the most efficient combination of labor and capital ( , ) L K ? b. Suppose that the firm wants to produce 27,000 units of output in the most efficient
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Unformatted text preview: way possible. How much does the firm spend? c. Suppose that the firm wants to produce 27,000 units of output and has exactly 10 units of capital in hand. In this situation, how many labor has to be employed? d. Suppose that the firm wants to spend exactly $1,200. What is the most efficient combination of labor and capital ( , ) L K ? e. Suppose that the firm spends exactly $1200 in the most efficient way possible. How much output can the firm produce?...
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