7. Suppose the firm can choose whatever combination of capital (K) and labor (L) it wantsto produce 600 units. Suppose the price of capital is $1,000 per machine per week. Whatcombination of inputs (K and L) will the firm use if the weekly salary of each worker is$400?2 Problem #3: Long-Run Labor Demand and Factor SubstitutabilitySuppose there are two inputs in the production function, labor (L) and capital (K), which canbe combined to produce Y units of output according to the following production function:Y = 30K + 10L

In economics, the marginal product of labor is the change in output that results from employing an…

7. Suppose the firm can choose whatever combination of capital (K) and labor (L) it wants to produce 600 units. Suppose the price of capital is $1,000 per machine per week. What combination of inputs (K and L) will the firm use if the weekly salary of each worker is $400?

7. Suppose the firm can choose whatever combination of capital (K) and labor (L) it wants to produce 600 units. Suppose the price of capital is $1,000 per machine per week. What combination of inputs (K and L) will the firm use if the weekly salary of each worker is $400?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

7. Suppose the firm can choose whatever combination of capital (K) and labor (L) it wants
to produce 600 units. Suppose the price of capital is $1,000 per machine per week. What
combination of inputs (K and L) will the firm use if the weekly salary of each worker is
$400?
2

Problem #3: Long-Run Labor Demand and Factor Substitutability
Suppose there are two inputs in the production function, labor (L) and capital (K), which can
be combined to produce Y units of output according to the following production function:
Y = 30K + 10L

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