Suppose a firm with a production function given by Q = K0.25L0.75 produces 1,500 units of output. The firm pays a wage of $50 per unit and pays a rental rate of capital of $50 per unit. (Note: 
) .
To minimize the cost of producing 1,500 units of output, the firm should use:
Definitions:
Keynes
Refers to John Maynard Keynes, a British economist whose theories on government spending and monetary policy formed the basis of Keynesian economics.
Aggregate Supply Curve
Graphical representation showing the total quantity of goods and services that producers in an economy are willing and able to supply at different price levels.
Price Level
An index that measures the average of current prices across the entire spectrum of goods and services produced in the economy compared to a base year.
Aggregate Supply Curve
A diagram that exhibits the comprehensive volume of goods and services that economic producers are ready and capable of supplying at assorted price levels.
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