00:01
So here we have a production function, right? and this production function, q, which is f of kl, is equal to minimum, so a very unique production function of 3k and 6l.
00:12
We've got a whole bunch of questions to get through.
00:15
So if k is equal to 2 and l is equal to 3, we just plug in.
00:20
Q is equal to minimum of 3 times 2, 6 times 3, which is the minimum of 6 and 18.
00:30
Which is equal to six, right? so the production would simply be six.
00:35
For b, we are now thinking about prices.
00:38
So the wage, the cost of labor is 55, and the rental rate on capital is 45.
00:45
What is the cost minimizing input mix, right? so we want to produce q equals six.
00:52
So this is a very special function.
00:56
The whole idea here is that to cost minimize, 3k has to be equal to 6l, right? because the idea is anything else is wasted.
01:12
If you have a minimum, when you go above the minimum in the other argument, you don't get anything more...