Calculating output
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The hourly wage rate is $6, the hourly rentail rate for capital is $8. The production function I found to be q=10K^.5L^.5
The captital if fixed at 225 hours in the short-run. I am trying to figure out how much output can be produced with 400 hours of labor? I would just plug in numbers but I dont know the relevance the $6 and the $8 have and how I could put that in an equation?
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Solution Summary
The expert calculates the output given a production function. The capital of fixed hours in the short run are determined.
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Quantity that can be produced with 400 hours of labor is simply 10*225^0.5*400^0.5=3000 units
The significance of $6 and $8 is to calculate the cost of ...
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