Question: Suppose a company has the Cobb-Douglas production function z = 100 0.75 y0.25 where x is the number of units of labor, y is the

Suppose a company has the Cobb-Douglas production function z = 100 0.75 y0.25 where x is the number of units of labor, y is the number of units of capital, and z is the units of production. Suppose further that labor costs $90 per unit, capital costs $150 per unit, and the total costs of labor and capital are limited to $90,000.

(a) Find the number of units of labor and the number of units of capital that maximize production.

(b) Find the marginal productivity of money and interpret it.

(c) Graph the constraint with the optimal value for production and with two other z-values (one smaller than the optimal value and one larger).

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