price of labor and capital
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Given the production function Q= 100(L^0.5)(K^0.5), where L = labor hours per unit time, K=machine hours per unit time, and Q=output per unit time.
1. If the price of capital and labor are equal, will the K/L ratio along the expansion path be greater, less than, or equal to 1?
2. What will be the K/L ratio when the price of labor is 2, and the price of capital is 1, and why?
3. What explains the direction of the changed K/L ratio in (d) from that in (c)?
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The following posting helps with microeconomics problems. The problems include the price of capital and labor and K/L ratios.
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Given the production function Q= 100(L^0.5) (K^0.5), where L = labor hours per unit time, K=machine hours per unit time, and Q=output per unit time.
1. If the price of capital and labor are equal, will the K/L ratio along the expansion path be greater, less than, or equal to 1?
Q= f (K, L)
Q= 100(L^0.5) (K^0.5)
In order to find K/L ratio at every point in our ...
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