A Manufacturing Firm Uses Only Capital (K)and Labour (L)to Produce

question 34

Multiple Choice

A manufacturing firm uses only capital (K) and labour (L) to produce its product, using a production function of Q = 10KL. It pays its workers w = $15 per hour and has a rental cost of capital of r = $5 per hour. If the firm wants to produce 480 units of output, the optimal bundle of inputs is:

• A)(3, 16).
• B)(4, 12).
• C)(12, 4)
• D)(6, 8).

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