1 1 9. The production function is F(L, K) = LEKE. In the short-run, the rm sells its output at a price of $10 per unit, and can hire labor at a wage of $5 per unit. Capital is xed at 25 units. The amount oflabor that minimizes costs is: a. L=1 b. L=2 c. L=10 d. None is correct 10. A firm is producing in the short-run [with K xed at 10 units] according to the following production function: Q = 101. 0.25152. You also know that w=$15, r=$20 and the firm can sell its product for P=$7.50. How much is the company's prot? a. Profit=$3287.5 b. Profit=$280 c. Profit=$1750 d. None is correct 11. Suppose the marginal product of labor is 8 and the marginal product of capital is 2. If the wage rate is $4 and the price of capital is $2, then in order to minimize costs the rm should use: More labor and less capital More capital and less labor You are at the optimal point and are prot-maximizing Twice as much labor as capital 21st 12. If your budget as a manager increases and the wage rate decreases what will happen to the isocost line? a. It will shift outward [parallel to itself) b. It will become steeper and shift outward c. It will become atter and shift outward d. It will shift inward (parallel to itself)