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3. A firm has a Cobb-Douglas production function for its output using the inputs of capital (K) and labor (L). The firm is currently paying $10 per labor hour and $5 per machine hour and is employing an equal number of machines and workers. If this bundle of inputs is cost minimizing, what we can infer about the marginal productivities of capital and labor at this point? a. MPK MPL = b. MPK = 2MPL c. MPL = 2MPK d. MPL = 5MPK

3. A firm has a Cobb-Douglas production function for its output using the inputs of capital (K) and labor (L). The firm is currently paying $10 per labor hour and $5 per machine hour and is employing an equal number of machines and workers. If this bundle of inputs is cost minimizing, what we can infer about the marginal productivities of capital and labor at this point? a. MPK MPL = b. MPK = 2MPL c. MPL = 2MPK d. MPL = 5MPK

ECON MICRO
ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
Problem 3.7P
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3. A firm has a Cobb-Douglas production function for its output using the inputs of capital (K) and labor (L). The firm is currently paying $10 per labor hour and $5 per machine hour and is employing an equal number of machines and workers. If this bundle of inputs is cost minimizing, what we can infer about the marginal productivities of capital and labor at this point? a. MPK MPL = b. MPK = 2MPL c. MPL = 2MPK d. MPL = 5MPK
Transcribed Image Text:3. A firm has a Cobb-Douglas production function for its output using the inputs of capital (K) and labor (L). The firm is currently paying $10 per labor hour and $5 per machine hour and is employing an equal number of machines and workers. If this bundle of inputs is cost minimizing, what we can infer about the marginal productivities of capital and labor at this point? a. MPK MPL = b. MPK = 2MPL c. MPL = 2MPK d. MPL = 5MPK
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