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

question 45

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 spends exactly $1200 in the most efficient way possible. How much output can the firm produce?

• A) 50,000
• B) 56,406.25
• C) 60,750
• D) 64,000

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Definitions:

Consequences

The outcomes or results that follow from a particular action or decision, which can be either positive or negative.

Later life

A phase in an individual's life cycle following middle age, often characterized by retirement, aging, and significant lifestyle changes.

Care work

Labor, often unpaid and performed by family members, associated with the care of the young, elderly, or sick, including both physical and emotional support.

Psychological costs

The mental and emotional toll or burdens that can result from stressful experiences or significant life events.