1. A firm’s production process is represented by y=L13K23. The price of Labor, w is $1...

1. A firm’s production process is represented by y=L13K23. The price of Labor, w is $1 and the price of capital,r, is $6.

a) What is the firm’s MRTS?

b) What are the firm’s cost minimizing levels of labor and capital (these will both be functions of y)?

c) What is the firm’s cost curve (ie, deriveC(y))?

d) Given that y= 500, what are the firms optimal levels of K and L? What is the firm’s(minimum) total cost?

Expert Solution

Rahul Sunny answered 2 years ago

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