Question

A production function for widgets is given by Q = f(L,K) = L^1/2 K^1/2 where L and K denote,

respectively, the level of the homogeneous units of labour and capital used in production.

a) If a producer wishes to produce 45 widgets and has hired 25 units of labour, how many units of capital must be used to fill this order?

b) If a producer has received an order for 30 widgets which must be produced but only has 9 units

of capital available in the short-run, how many units of labour must be hired in order fill this order?

c) If no capital is available in the short-run for use in the production process, how many widget could a producer produce?

5. Suppose that the production function for widgets is Q = g(L,K) = 1L + 2K, and that the cost of one unit of capital is more than double the cost of one unit of labour. If a producer wishes to

Answer 1