Answered: subject to the budget constraint 5L +…

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Economics

subject to the budget constraint 5L + 10K = 75; where L is labour and K is capital. Derive the capital to labour ratio.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 3SQP

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Question

Consider the following production function:

Q = 100L^0.5K^0.5

subject to the budget constraint 5L + 10K = 75; where L is labour and K is capital. Derive the capital to labour ratio.

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