Computing optimal combination of inputs

Assignment Help Managerial Economics

Reference no: EM1371952

Let the production function be given by
Q = K^1/2*L^1/2, WL=$5, WK=$20,

Assume the plant size (K) is fixed in the short run at 100.

A. With K = 100, how many units of L are required to produce 400 units of
output?
a. 400
b. 100
c. 1600
d. 3200
e. none of the above

B. If this amount of labor (found in question A) is combined with 100 units of K:
a. MPL/WL = MPK/WK
b. MPL/WL > MPK/WK
c. MRS = WL/WK
d. MPK/WK > MPL/WL
e. Two of the above

Reference no: EM1371952

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