Suppose That a Firm's Production Function of Output Q Is $L = \sqrt { \frac { w Q } { 25 r } }$

question 27

Multiple Choice

Suppose that a firm's production function of output Q is a function of only two inputs, labor (L) and capital (K) and can be written Q = 25LK with marginal products MP_L = 25K and MP_K = 25L. Letting the wage rate for labor be w and the rental rate of capital be r, the equation for the firm's demand for labor would be:

• A) \(L = \sqrt { \frac { w Q } { 25 r } }\)
• B) \(L = \sqrt { \frac { 25 r } { w Q } }\)
• C) \(L = \sqrt { \frac { r Q } { 25 w } }\)
• D) \(L = \sqrt { \frac { 25 w } { r Q } }\)

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Definitions:

Confining Pressure

The type of pressure that results when the force imposed on a rock is the same amount from all directions.

Lattice Vibration

The collective oscillations of atoms in a crystalline solid, contributing to the material's thermal and electrical properties.

Liquid-Solid Boundary

The interface between a liquid and a solid phase, significant in the study of phase transitions and material properties.

Temperature Increase

A rise in the heat energy reflected in an environment or substance, often discussed in relation to global warming.