A Company Has the Cobb-Douglas Production Function , Where

question 107

Multiple Choice

A company has the Cobb-Douglas production function , where x is the number of units of labor, y is the number of units of capital, and z is the units of production. Suppose labor costs $200 per unit, capital costs $150 per unit, and the total cost of labor and capital is limited to $300,000. Find the number of units of labor and the number of units of capital that maximize production. ​

• A)1,500 units of labor; 2,000 units of capital
• B)1,200 units of labor; 2,000 units of capital
• C)1,500 units of labor; 400 units of capital
• D)1,200 units of labor; 400 units of capital
• E)12,000 units of labor; 4,000 units of capital

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Definitions:

Independent Contractor

An individual or entity contracted to perform work for another entity as a non-employee, under specific terms.

Unusually Hazardous

Activities or conditions that carry an exceptionally high risk of causing harm or damage.

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Protected or safeguarded from potential harm or interference.

Inferred

Something concluded or deduced based on evidence and reasoning rather than explicit statements.