The technology for making nails is described by the Cobb-Douglas production function Q(L,K) = L*K, where L is the number of workers and K is the number of machines. Each worker is two times as expensive as a machine. The MRTS between Labor and Capital at the cost-minimizing output combination is

The technology for making nails is described by the Cobb-Douglas production function Q(L,K) = L*K, where L is the number of workers and K is the number of machines. Each worker is two times as expensive as a machine. The MRTS between Labor and Capital at the cost-minimizing output combination is

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 3SQP

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