0.8₁A firm's production function is given by Q = 40K0.8L0.2Each unit of capital costs $40 and each unit of labour costs $80.(a) Find the maximum level of output if the total input costs are $400,000.(b) Estimate the increase in production if an addtional $5,000 is made available.(c) Show that the ratio of marginal product to price is the same for both inputs.(a) Maximum output Q =(Round to the nearest integer as needed.) (a) Maximum output Q =(Round to the nearest integer as needed.)(b) Increase in output is units(Round to the nearest unit as needed.)(c) The ratio of the marginal product of capital to price is(Round your answer to two decimal places.)The ratio of the marginal product of labour to price is(Round your answer to two decimal places.)

Given Production function: Q=40K0.8L0.2 (1) Price of labor PL=$80 Price of capital…

A firm's production function is given by Q=40K L Each unit of capital costs $40 and each unit of labour costs $80. (a) Find the maximum level of output if the total input costs are $400,000. (b) Estimate the increase in production if an addtional $5,000 is made available. (c) Show that the ratio of marginal product to price is the same for both inputs.

A firm's production function is given by Q=40K L Each unit of capital costs $40 and each unit of labour costs $80. (a) Find the maximum level of output if the total input costs are $400,000. (b) Estimate the increase in production if an addtional $5,000 is made available. (c) Show that the ratio of marginal product to price is the same for both inputs.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

0.8₁
A firm's production function is given by Q = 40K0.8L0.2
Each unit of capital costs $40 and each unit of labour costs $80.
(a) Find the maximum level of output if the total input costs are $400,000.
(b) Estimate the increase in production if an addtional $5,000 is made available.
(c) Show that the ratio of marginal product to price is the same for both inputs.
(a) Maximum output Q =
(Round to the nearest integer as needed.)

(a) Maximum output Q =
(Round to the nearest integer as needed.)
(b) Increase in output is units
(Round to the nearest unit as needed.)
(c) The ratio of the marginal product of capital to price is
(Round your answer to two decimal places.)
The ratio of the marginal product of labour to price is
(Round your answer to two decimal places.)

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