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A firm has a production function Q=L² K last year, this year the firm have a technology improvement, which yields a new production function Q=L³K². If the optimal labor and capital are always greater than 1 (L>1, K>1). This firm has a: neutral technological progress labor saving technological progress capital saving technological progress crisis Let a firm use labor (L) and capital (K) as its only inputs to produce an output, Q. The cost of labor is w = $10 per labor hour and the cost of capital is r = $15 per machine hour. What is the equation of the $2-million isocost line? = 2m (10L)(15K) 1.5m 5L 15K = 2m = L + K 2m 10L 15K =

A firm has a production function Q=L² K last year, this year the firm have a technology improvement, which yields a new production function Q=L³K². If the optimal labor and capital are always greater than 1 (L>1, K>1). This firm has a: neutral technological progress labor saving technological progress capital saving technological progress crisis Let a firm use labor (L) and capital (K) as its only inputs to produce an output, Q. The cost of labor is w = $10 per labor hour and the cost of capital is r = $15 per machine hour. What is the equation of the $2-million isocost line? = 2m (10L)(15K) 1.5m 5L 15K = 2m = L + K 2m 10L 15K =

ENGR.ECONOMIC ANALYSIS
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 has a production function Q=L² K last year, this year the firm have a technology improvement, which yields a new production function Q=L³K². If the optimal labor and capital are always greater than 1 (L>1, K>1). This firm has a: neutral technological progress labor saving technological progress capital saving technological progress crisis
Transcribed Image Text:A firm has a production function Q=L² K last year, this year the firm have a technology improvement, which yields a new production function Q=L³K². If the optimal labor and capital are always greater than 1 (L>1, K>1). This firm has a: neutral technological progress labor saving technological progress capital saving technological progress crisis
Let a firm use labor (L) and capital (K) as its only inputs to produce an output, Q. The cost of labor is w = $10 per labor hour and the cost of capital is r = $15 per machine hour. What is the equation of the $2-million isocost line? = 2m (10L)(15K) 1.5m 5L 15K = 2m = L + K 2m 10L 15K =
Transcribed Image Text:Let a firm use labor (L) and capital (K) as its only inputs to produce an output, Q. The cost of labor is w = $10 per labor hour and the cost of capital is r = $15 per machine hour. What is the equation of the $2-million isocost line? = 2m (10L)(15K) 1.5m 5L 15K = 2m = L + K 2m 10L 15K =
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