(c) If the price of capital is $750 a week and the price of labor is $300 a week, which input does the firm employ? How much does it employ? (d) If the price of labor drops to $225 a week due to outsourcing, which input does the firm employ? How much does it employ?
(c) If the price of capital is $750 a week and the price of labor is $300 a week, which input does the firm employ? How much does it employ? (d) If the price of labor drops to $225 a week due to outsourcing, which input does the firm employ? How much does it employ?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![(c) If the price of capital is $750 a week and the price of labor is $300 a
week, which input does the firm employ? How much does it employ?
(d) If the price of labor drops to $225 a week due to outsourcing, which
input does the firm employ? How much does it employ?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3b0b060e-93ac-4da5-8a74-39de2e4e35de%2F58934325-d1a7-4eb5-b404-80bc52d48c1c%2Fhh5m2r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(c) If the price of capital is $750 a week and the price of labor is $300 a
week, which input does the firm employ? How much does it employ?
(d) If the price of labor drops to $225 a week due to outsourcing, which
input does the firm employ? How much does it employ?
![2. Suppose there are two inputs in the production function, labor and cap-
ital, and these two inputs are perfect substitutes. The production func-
tion for how much output is produced in a week can be described by
q(L,K)=L+3K
and the firm wants to produce q 100 units this week. The current
price of the firm's output is P = $500
1](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3b0b060e-93ac-4da5-8a74-39de2e4e35de%2F58934325-d1a7-4eb5-b404-80bc52d48c1c%2Fm7qhxx_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. Suppose there are two inputs in the production function, labor and cap-
ital, and these two inputs are perfect substitutes. The production func-
tion for how much output is produced in a week can be described by
q(L,K)=L+3K
and the firm wants to produce q 100 units this week. The current
price of the firm's output is P = $500
1
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