# Question

A firm produces output according to a production function Q = F (K, L) = min {4K, 8L}.

a. How much output is produced when K = 2 and L = 3?

b. If the wage rate is $ 60 per hour and the rental rate on capital is $ 20 per hour, what is the cost- minimizing input mix for producing 8 units of output?

c. How does your answer to part b change if the wage rate decreases to $ 20 per hour but the rental rate on capital remains at $ 20 per hour?

a. How much output is produced when K = 2 and L = 3?

b. If the wage rate is $ 60 per hour and the rental rate on capital is $ 20 per hour, what is the cost- minimizing input mix for producing 8 units of output?

c. How does your answer to part b change if the wage rate decreases to $ 20 per hour but the rental rate on capital remains at $ 20 per hour?

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