Problem
You are a car producer. You can make cars using either workers or machines or a combination of both. Machines and workers are perfect substitutes: you can produce each car using either 100 worker-hours (L) or 10 machine- hours (K). Assume you want to produce 10 cars (C).
1. Calculate the marginal product of a worker-hour and the marginal product of a machine-hour.
2. Calculate your total machine-hours, worker-hours, and costs if a machine- hour costs v=$250 and a worker-hour costs w=$20.
3. Calculate your total machine-hours, worker-hours, and costs if the price of a worker-hour increases to $30.