Microeconomics- production function
I was wondering if anyone could please help me understand the following question?
Thanks in advance!
Firm A's production function is:
Q = 5LK,
= output, L = labour measured in person hours, and K = capital measured in
machine hours. The firm's labour cost is $20 per hour, while the firm uses $80 per hour
as an implicit machine rental charge per hour. The firm's current budget is $64,000 per
month to pay labor and capital.
a) Given the information above, determine firm A's optimal capital/labor ratio.
b) Set up and explain the constrained maximisation problem using the
information given above.
Re: Microeconomics- production function
Hello Guys! Does anyone of You know how to do this task? I have no idea what I can write about this in 500 words :(
I will be so grateful if someone helps me.. please
Labour force and production function...
A company’s labour force is composed of three categories. Firstly, there are unskilled workers, described with the symbol L1, displaying low productivity, employed at packing and loading the baked pies. Then, the firm employs skilled workers, described with the symbol L2, displaying high productivity, employed and the actual making of the pies. Finally, the business is managed by skilled administrative personnel, described with the symbol L3, displaying moderate productivity, employed at all kinds of administrative tasks. Below you will find three possible, logarithmic formulae of the company’s production function. Choose the right one and write an argumentation of
500 – 700 words, to justify your choice..
a)ln(Y)=ln(K^a )+ln(L1^b1 )+ln(L2^b2 )+ln(L3^b3 )+ln(A) a>0;b2>b3>b1>0
b)ln(Y)=ln(K^a )+ln(L1^b1 )+ln(L2^b2 )+ln(L3^b3 )+ln(A) a>0;b3>b2>b1>0
c)ln(Y)=ln(K^a )+ln(L1^b1 )+ln(L2^b2 )+ln(L3^b3 )+ln(A) a>0;b1>b2>b3>0