1. Suppose that a producer has the following production function: Q = K LU6 Where Q is output, and L and K are man-hours and machine-hour the two inputs used in the production process. 1A) Set up the cost minimization problem 1B) Determine the cost-minimize ratio of inputs where capital costs $1 per machine-hour and labor costs $4 per lab- hour. 1C) How many worker-hours are used to produce 100 units of output at these prices?

1. Suppose that a producer has the following production function: Q = K LU6 Where Q is output, and L and K are man-hours and machine-hour the two inputs used in the production process. 1A) Set up the cost minimization problem 1B) Determine the cost-minimize ratio of inputs where capital costs $1 per machine-hour and labor costs $4 per lab- hour. 1C) How many worker-hours are used to produce 100 units of output at these prices?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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