A Firm's Production Process Uses Labor $L$ , and Capital $K$ , to Produce an Output

question 70

Multiple Choice

A firm's production process uses labor, $L$ , and capital, $K$ , to produce an output, $Q$ according to the function $Q = 25 K L$ . Let labor be fixed at level $L = L$ . What is the cost minimizing level of capital that the firm must use to produce a target level of output, $Q = Q$ ?

• A) \(K = \frac { \bar { L } } { 25 Q }\)
• B) \(K = 25 \bar { L } Q\)
• C) \(K = \frac { \bar { Q } } { 25 \bar { L } }\)
• D) \(K = \frac { Q ^ { 2 } } { 2500 \bar { L } }\)

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Definitions:

Residual Volume

Volume of air remaining in the lungs after a maximum expiratory effort.

Inspiratory Reserve Volume

The amount of air that can be forcibly inhaled after a normal inspiration, reflecting the capacity for additional air intake beyond the typical tidal volume.

Respiratory Membrane

A thin boundary comprising the alveolar and capillary walls where gas exchange between air and blood takes place in the lungs.

Diffusion

The movement of molecules or particles from regions of higher concentration to regions of lower concentration.