QUESTION 7 A profit maximizing firm produces output using capital, K, and labour, L, in the following production technology: Y = K^0.5*L^0.5 The cost function of the firm is: C = w*L + r*K where r=0.6. What is the capital-labour ratio of the firm? (State your answer to 2 decimal places.)

MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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1

QUESTION 7
A profit maximizing firm produces output using capital, K, and labour, L, in the following production
technology:
Y = K^0.5*L^0.5
The cost function of the firm is:
C = w*L + r*K
where r=0.6.
What is the capital-labour ratio of the firm?
(State your answer to 2 decimal places.)
Transcribed Image Text:QUESTION 7 A profit maximizing firm produces output using capital, K, and labour, L, in the following production technology: Y = K^0.5*L^0.5 The cost function of the firm is: C = w*L + r*K where r=0.6. What is the capital-labour ratio of the firm? (State your answer to 2 decimal places.)
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