What is the maximum output firm can produce for a budget


Problem

1. A consumer spends all her income of £120 on the two goods A and B. Good A costs £10 a unit and good B costs £15. What combination of A and B will she purchase if her utility function is U = 4A0.5B0.5?

2. If a firm faces the production function Q = 4K0.5L0.5, what is the maximum output it can produce for a budget of £200? The prices of K and L are given as £4 per unit and £2 per unit respectively.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: What is the maximum output firm can produce for a budget
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