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Suppose that a firm’s production function is given by Q = KL + K. At point A, the firm uses K= 3 units of capital and L = 5 units of labor. At point B, along the same isoquant, the firm would only use 1 unit of capital.
Calculate how much labor is required at point B.
Suppose that there is no fixed production input (i.e. long run.) With the production function above, the slope of the isoquant is given by MRTS = -(K/2L). Assume the firm choo
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The marginal product of labor is 10 and the marginal product of capital is 20. If the wage rate is $10 and the price of capital is $5, is the firm using the right balance of c
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A firm uses labor and capital to produce output according to the production function q= 100KL, where L is the number of units of labor used and K is the number of machines. Su
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