Question: I need help with this question. A rm uses labor and machines to produce output according to the production function e; M) = ttest, where

I need help with this question.

I need help with this question. A rm uses labor and machines

A rm uses labor and machines to produce output according to the production function e; M) = ttest, where L is the number of units of labor used and M is the number of machines. The cost of labor is $3D per unit and the cost of using a machine is $213. (1} 011 a graph, draw an isocost line for this rm, showing combinations of machines and labor that cost $43!?!) and another isocost line showing combinations that cost $301]. What is the slope of these isocost lines? (2] Suppose that the rm wants to produce its output in the cheapest possible way. Find the number of machines it would use per worker. (Hint: The rm will produce at a point where the slope of the production isoquant equals the slope of the isocost line} (3} On the graph, sketch the production iscquant corresponding to an output of 60. Calculate the amount of labor and the number of macbjms that are used to produce ll units of output in the cheapest possible wayI given the above factor prices. Calculate the cost of producing El] units at these factor prices. (4} How many units of labor and how many machines would the rm use to produce 3,: units in the cheapest possible way'iI How much would this cost? (Hint: Notice that there are constant returns to scale.)

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