The Quality $Q$ Of a Good Produced by a Company Is Given By Is

question 29

Essay

The quality $Q$ of a good produced by a company is given by $Q = 10 K ^ { - 0.6 } L ^ { 0.4 }$ , where $K$ is the quantity of capital and $L$ is the quantity of labor used. Capital costs are $20 per unit, labor costs are $10 per unit, and the company wants to keep costs for capital and labor combined to $150.(a) What combination of labor and capital should be used to produce maximum quantity? What is the maximum value?
(b) Draw the level curves of $Q$ and the graph of the budget constraint on the same set of axes.(c) Complete the value of $\lambda$ . What does $\lambda$ represent?

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