5 QUESTION 23A wheat farmer has a production function ofq = VKL = K0.5L0.5with marginal productsMPL = 0.5k0.5L-0.5-0.5, 0.5MPK = 0.5K-0.5=0.5,KCalculate the cost-minimizing amount of capital to produce 300 units of output if the wage rate is 12 and the user cost of capital is 3.

Answer: Given, Production function: q=KL=K0.5L0.5 Marginal products:MPL=0.5KLMPK=0.5LK Since the q…

Answered: QUESTION 23 A wheat farmer has a…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 4CQQ

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QUESTION 23 A wheat farmer has a production function of q = KL = K0.5L0.5 with marginal products MPL = 0.5K0.5L -0.5, K = 0.5, -0.5 0.5 MPK = 0.5K-0.5L = 0.5, Calculate the cost-minimizing amount of capital to produce 300 units of output if the wage rate is 12 and the user cost of capital is 3.