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A Firm's Production Function Is Given By Q=KLQ = K L

Question 59

Multiple Choice

A firm's production function is given by Q=KLQ = K L . The marginal products of labor and capital are, respectively, MPL=KM P _ { L } = K and MPK=LM P _ { K } = L . The wage rate of labor is w=$10w = \$ 10 and the rental rate of capital is r=$20r = \$ 20 . What is the most efficient combination of labor and capital (L,K) ( L , K ) that also yields a cost of exactly $1000\$ 1000 ?


A) (10,45) ( 10,45 )
B) (25,50) ( 25,50 )
C) (50,25) ( 50,25 )
D) (20,40) ( 20,40 )

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