00:01
Hello, here we have the production function which is equal to q minimum from two numbers 2k and 4l and in the part a how much output is produced when k is 2 and l is 3 so let's calculate q is the minimum from 2 times k and k is 2 from 4 and l is 3 4 is multiplied by 3 is 12 we need to choose the minimum number the lowest number and this number is 4 so 4 units of output will be produced when k is 2 and l is 3 the next part, if the wage rate is 30 and if the rental rate on capital is 10 per hour, what is the cost maximizing input mix for producing four units of output? so we need to produce four units of output.
01:30
So we need to choose, in this case the optimal quantity should be equal to the minimum number from 4 and 4.
01:42
This means that k should be equal to 2 and l should be equal to 1.
01:51
At this combination we have the cost minimizing input.
02:03
We cannot use less input.
02:07
Otherwise we will not have four units of output.
02:10
And if we increase the k or l's amount, we will not change the quantity because we need to choose the minimum number.
02:25
And if we increase either k or l without increasing both of them, output will be 4 anyway.
02:36
And this is the cost minimizing input.
02:41
K is equal to 2 and l is equal to 1.
02:47
The part c, how does your answer to part b change if the wage rate decreases to 10 dollars per hour? and actually there is no change...