A firm produces output according to a production function:Q = F(K,L) = min {6K,2L}.a. How much output is produced when K = 2 and L = 3? unit(s)b. If the wage rate is $30 per hour and the rental rate on capital is $10 per hour, what is the cost-minimizing input mix for producing 6 units of output?Capital: Labor: c. How does your answer to part b change if the wage rate decreases to $10 per hour but the rental rate on capital remains at $10 per hour? (Choose one that is the best answer)Capital decreases and labor increases.It does not change.Capital increases and labor decreases.Capital and labor increase. A firm produces output according to a production function:Q= RK,L) = min {6K,2L).a. How much output is produced when K=2 and L= 3?|unit(s)b. If the wage rate is $30 per hour and the rental rate on capital is $10 per hour, what is the cost-minimizing input mix for producing6 units of output?Capital:Labor:c. How does your answer to part b change if the wage rate decreases to $10 per hour but the rental rate on capital remains at $10 perhour?Capital decreases and labor increases.O It does not change.O Capital increases and labor decreases.O Capital and labor increase.

Given: Q = F(K,L) = min {6K,2L} K=2, L=3 Therefore, Q= min(6*2,2*3) Q=min (12,6) Therefore, out of…

Answered: A firm produces output according to a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm produces output according to a production function:

Q = F(K,L) = min {6K,2L}.

a. How much output is produced when K = 2 and L = 3?

unit(s)

b. If the wage rate is $30 per hour and the rental rate on capital is $10 per hour, what is the cost-minimizing input mix for producing 6 units of output?

Capital:
Labor:

c. How does your answer to part b change if the wage rate decreases to $10 per hour but the rental rate on capital remains at $10 per hour? (Choose one that is the best answer)

Capital decreases and labor increases.
It does not change.
Capital increases and labor decreases.
Capital and labor increase.

A firm produces output according to a production function:
Q= RK,L) = min {6K,2L).
a. How much output is produced when K=2 and L= 3?
|unit(s)
b. If the wage rate is $30 per hour and the rental rate on capital is $10 per hour, what is the cost-minimizing input mix for producing
6 units of output?
Capital:
Labor:
c. How does your answer to part b change if the wage rate decreases to $10 per hour but the rental rate on capital remains at $10 per
hour?
Capital decreases and labor increases.
O It does not change.
O Capital increases and labor decreases.
O Capital and labor increase.

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