Suppose that the production function for Hannah and Sam's home remodeling business is             Q = F(L,K)             Q = 10L0.1K0.4. Assume the wage rate is $8,000 per week and the cost of renting a unit of capital is $1,000 per week. a. What is the least-cost input combination for remodeling 400 square feet each week?       Instructions: Round your answers to 2 decimal places.       units of labor and  units of capital.   b. What is the total cost?          Instructions: Round your answer to 2 decimal places.     $  .

Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section: Chapter Questions
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  1. Suppose that the production function for Hannah and Sam's home remodeling business is

                Q = F(L,K)

                Q = 10L0.1K0.4.

    Assume the wage rate is $8,000 per week and the cost of renting a unit of capital is $1,000 per week.

    a. What is the least-cost input combination for remodeling 400 square feet each week?  

        Instructions: Round your answers to 2 decimal places.

          units of labor and  units of capital.  

    b. What is the total cost?     

        Instructions: Round your answer to 2 decimal places.

        $  .
    revised jrl 08-11-2011
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