A Firm's Production Function Is Given By $Q = K ^ { 2 } L$

question 12

Multiple Choice

A firm's production function is given by $Q = K ^ { 2 } L$ . The marginal products of labor and capital are, respectively, $M P _ { L } = K ^ { 2 }$ and $M P _ { X } = 2 K L$ . Further, the wage rate is $w = \$ 10$ and the rental rate of capital is $r = \$ 20$ . Suppose that the firm wants to produce 27,000 units of output in the most efficient way possible. How much does the firm spend?

• A) $600
• B) $900
• C) $1,500
• D) $2,100

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Definitions:

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The mathematical framework for probability in which a sample space, together with a probability measure, models the outcome of a random experiment.

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