A firm produces output using the production function: q=L+2K. The wage rate is $20 and the rental rate is $50. Which will be true about the choice of inputs when the firm minimizes costs. Select one: a. Cannot be determined given the information. b. The firm would use only capital and no labor. c. The firm would use labor for 1/3 of its input and capital for 2/3 of its input. d. The firm would use only labor and no capital. The firm would use equal amounts of labor and capital.
A firm produces output using the production function: q=L+2K. The wage rate is $20 and the rental rate is $50. Which will be true about the choice of inputs when the firm minimizes costs. Select one: a. Cannot be determined given the information. b. The firm would use only capital and no labor. c. The firm would use labor for 1/3 of its input and capital for 2/3 of its input. d. The firm would use only labor and no capital. The firm would use equal amounts of labor and capital.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Lesson 8 - Costs
Question 8
Transcribed Image Text:A firm produces output using the production
function: q=L+2K. The wage rate is $20 and the
rental rate is $50. Which will be true about the
choice of inputs when the firm minimizes costs.
Select one:
a. Cannot be determined given the
information.
b. The firm would use only capital and no
labor.
c. The firm would use labor for 1/3 of its
input and capital for 2/3 of its input.
d. The firm would use only labor and no
capital.
The firm would use equal amounts of
labor and capital.
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