6. Optimize the Cobb-Douglas production function given the following parameters. The maximum about of money available to spend is $1, 600 where the price of K = 12 and the price of L = 6. That is P = 12 and P = 6. The function is given as q = K0.4L0.6. Using the Lagrangian method, what are the optimal values of Ko and Lo?

6. Optimize the Cobb-Douglas production function given the following parameters. The maximum about of money available to spend is $1, 600 where the price of K = 12 and the price of L = 6. That is P = 12 and P = 6. The function is given as q = K0.4L0.6. Using the Lagrangian method, what are the optimal values of Ko and Lo?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.9P

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