Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 15

Suppose a firm faces a wage rate of 10 and a capital rental rate of 4. In the following two situations, how much of each input should this firm hire in order to minimize the cost of producing an output of 100 units? What are the firm's total costs? How would the firm's total costs change if capital rental rates rose to 10?
1. The firm produces with a fixed-proportions production function that requires 0.1 labor hours and 0.2 machine hours for each unit of output.
2. The firm's production function is given by Q = 10L + 5K.