Let a Firm Use Labor $( L )$ And Capital (K) as Its Only Inputs to Produce an (K)

Multiple Choice

Let a firm use labor $( L )$ and capital (K) as its only inputs to produce an output, $Q$ . The cost of labor is $w = \$ 5$ per labor hour and the cost of capital is $r = \$ 15$ per machine hour. What is the equation of the $\$ 1.5$ -million isocost line?

A) $1.5 m = L + K$ .
B) $1.5 \mathrm {~m} = 5 \mathrm {~L} + 15 \mathrm {~K}$ .
C) $1.5 \mathrm {~m} = ( 5 \mathrm {~L} ) ( 15 \mathrm {~K} )$ .
D) $1.5 \mathrm {~m} = ( 5 \mathrm {~L} + 15 \mathrm {~K} ) Q$ .