Suppose the production function is q = 12 L0.25 K0.75. Determine the long-run capital-to-labor ratio (K/L) if the cost a unit of capital (r) is three times the cost of a unit of labor (w)
What will be an ideal response?
The firm minimizes costs by setting MRTS = w/r. MRTS = MPL/MPK = K/3L = 1/3 = w/r. This firm will set K/L equal to one.
Economics
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If the annual interest rate is 5 percent,
a. $100 saved today will be worth $105 after one year b. $90 saved today will be worth $100 after one year c. $100 saved today will be worth $5 after one year d. $99 saved today will be worth $100 after one year e. $100 saved today will be worth $1,000 after one year
Economics
The tradeoffs and connections between the goals of macroeconomics may be ___________ in the short run and the long run.
a. similar b. different c. identical d. problematic
Economics