George is a loan officer at a small bank, and he must make 25 loans per month. As a loan officer, George must choose capital (K) and labor (L) to minimize his costs while achieving his loan target. Loans (Q) are made using capital and labor via the relationship Q(K,L)=K*L. Labor and capital are paid w wages and r in rent, respectively. a) What is George’s objective function b) What is George’s constraint? c) Which variables are endogenous, and which variables are exogenous? d) What is George’s constrained optimization problem?

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a Georges objective function is to minimize his costs which can be represented as Minimize wL rK whe... View the full answer