Question
Suppose that the production function for Hannah and Sam's home remodeling business is Q = F(L,K)...
Suppose that the production function for Hannah and Sam's home
remodeling business is
Q
= F(L,K)
Q
= 10L0.2K0.3.
Assume the wage rate is $8,000 per week and the cost of renting a
unit of capital is $2,000 per week.
a. What is the least-cost input combination for remodeling 500
square feet each week?
Instructions: Round your
answers to 2 decimal places.
units of labor and units
of capital.
b. What is the total cost?
Instructions: Round your
answer to 2 decimal places.
$.
Homework Answers
Answer #1
Least cost input combination is 853.19 units of labour and 5119.18 units of capital. Total cost is $ 17,063,880. The calculations and detailed explanation are in following 3 images:
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Similar Questions
Suppose that the production function for Hannah and Sam's home remodeling business is Q = F(L,K)...
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