A community for students.
Here's the question you clicked on:
 0 viewing
anonymous
 2 years ago
Suppose the production function of a firm is: Q =100L^0.5K^0.5
The price per unit of capital (r) and labor (w) are $40 and $50, respectively.
a) Determine the type of returns to scale.
b) If the firm is contracted to produce 1118 units of output, determine the quantity of
capital and labor that the firm should use to minimize the total costs.
c) Using bordered Hessian, prove that the secondorder conditions for minimum is
satisfied.
d) Prove that the combination of capital and labor inputs derived in (b) is the efficient
combination of capital and labor [Hint: Efficient combination of K and L is achieved
when MPL/MPK= w/r].
anonymous
 2 years ago
Suppose the production function of a firm is: Q =100L^0.5K^0.5 The price per unit of capital (r) and labor (w) are $40 and $50, respectively. a) Determine the type of returns to scale. b) If the firm is contracted to produce 1118 units of output, determine the quantity of capital and labor that the firm should use to minimize the total costs. c) Using bordered Hessian, prove that the secondorder conditions for minimum is satisfied. d) Prove that the combination of capital and labor inputs derived in (b) is the efficient combination of capital and labor [Hint: Efficient combination of K and L is achieved when MPL/MPK= w/r].

This Question is Open
Ask your own question
Sign UpFind more explanations on OpenStudy
Your question is ready. Sign up for free to start getting answers.
spraguer
(Moderator)
5
→ View Detailed Profile
is replying to Can someone tell me what button the professor is hitting...
23
 Teamwork 19 Teammate
 Problem Solving 19 Hero
 Engagement 19 Mad Hatter
 You have blocked this person.
 ✔ You're a fan Checking fan status...
Thanks for being so helpful in mathematics. If you are getting quality help, make sure you spread the word about OpenStudy.