Question: 4) (25 points) Suppose there are two inputs in the production function, labor and capital. A firm's technology requires it to combine 5 person-hours of

4) (25 points) Suppose there are two inputs in the production

4) (25 points) Suppose there are two inputs in the production function, labor and capital. A firm's technology requires it to combine 5 person-hours of labor with 3 machine hours to produce 1 unit of output. The firm wants to produce 20 units of output. Suppose the price of capital is $50 per hour. a) What combination of inputs will the firm use if the hourly wage rate is $10 ? b) What combination of inputs will the firm use if the hourly wage rate is $15 ? c) Draw the labor demand curve for this firm and determine the elasticity of labor demand

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