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Suppose that output q represents the number of products produced,K is the number of machines used,...

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Economics

Suppose that output q represents the number of productsproduced,K is the number of machines used, and L the number ofworkers used. To produce one unit of q, one must can use 1 machineOR 4 workers. The cost of a unit of K is r= 100, and the cost of aunit of L is w= 20:First, draw the isoquant for q= 10. Next, drawthe isocost line for C= $2000.Using your isocost-isoquant diagram,identify the cost-minimizing number of machines and workers toproduce q= 10products per hour.(b) What is the MRTSK,Lfor the following production function:Q=KL^2? Is this technologyCRS, IRS or DRS? How do you know? (C) What is theMRTSK,L for the following production function:Q= 2K+L?Isthis technologyCRS, IRS or DRS? How do you know?

Answer & Explanation Solved by verified expert
3.5 Ratings (446 Votes)
a Isoquant line for q 10 K 10 L4 or L 40 see graphA Isocost line for C 2000 100K 20L 2000 or 5K L 100 see graph BFor q 10 Minimum    See Answer
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