A firm produces output according to a production function: Q = F(K,L) = min {3K,6L}.
a. How much output is produced when K = 2 and L = 3? ______
b. If the wage rate is $55 per hour and the rental rate on capital is $45 per hour, what is the cost-minimizing input mix for producing 6 units of output? Capital___ Labor____
c. How does your answer to part b change if the wage rate decreases to $45 per hour but the rental rate on capital remains at $45 per hour?
- Capital decreases and labor increases
-Capital increases and labor decreases
-Capital and labor increase
-It does not change.