A firm produces output according to a production function: Q = F(K,L) = min {2K,2L}.
a. How much output is produced when K = 2 and L = 3?
b. If the wage rate is $40 per hour and the rental rate on capital is $20 per hour, what is the cost-minimizing input mix for producing 4 units of output?
c. How does your answer to part b change if the wage rate decreases to $20 per hour but the rental rate on capital remains at $20 per hour?