A Firm with a Production Function Q = KL (Where

question 84

Multiple Choice

A firm with a production function Q = KL (where K is units of capital and L is units of labor) has an expansion path that is given by K = 2L. The wage rate (W) is $20 and the rental on capital is $10. Assuming that the firm is using the optimal mix of inputs for any given output level, the quantity of output using one unit of labor is ____.

• A) 32
• B) 18
• C) 8
• D) 2

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