A Firm's Production Function Is Given by Q = KL

question 3

Multiple Choice

A firm's production function is given by Q = KL.The marginal products of labor and capital are,respectively,MP_L = K and MP_K = L.The wage rate of labor is w = $10 and the rental rate of capital is r = $20.The firm wants to produce 1,800 units of output.What is the most efficient combination of labor and capital ?

• A) (10, 20)
• B) (20, 90)
• C) (60, 30)
• D) (90, 20)

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Definitions:

Marrow

The soft tissue found in the hollow interior of bones where blood cells are produced.

Medullary Cavity

The central cavity of bone shafts where red bone marrow and/or yellow bone marrow (fat) is stored; also known as the marrow cavity.

Endosteum

A thin vascular membrane of connective tissue that lines the inner surface of bones, involved in bone growth and healing.

Flat Bones

Bones characterized by their thin, flattened shape, providing protection to internal organs and serving as areas for muscle attachment, examples include the skull, ribs, and pelvis.