A company has the Cobb-Douglas production function , where x is the number of units of labor, y is the number of units of capital, and z is the units of production. Suppose labor costs $200 per unit, capital costs $150 per unit, and the total cost of labor and capital is limited to $300,000. Find the number of units of labor and the number of units of capital that maximize production.
A) 1,500 units of labor; 2,000 units of capital
B) 1,200 units of labor; 2,000 units of capital
C) 1,500 units of labor; 400 units of capital
D) 1,200 units of labor; 400 units of capital
E) 12,000 units of labor; 4,000 units of capital

Question

A company has the Cobb-Douglas production function  , where x is the number of units of labor, y is the number of units of capital, and z is the units of production. Suppose labor costs $200 per unit, capital costs $150 per unit, and the total cost of labor and capital is limited to $300,000. Find the number of units of labor and the number of units of capital that maximize production. ​
A) 1,500 units of labor; 2,000 units of capital 
B) 1,200 units of labor; 2,000 units of capital 
C) 1,500 units of labor; 400 units of capital 
D) 1,200 units of labor; 400 units of capital 
E) 12,000 units of labor; 4,000 units of capital

Quizplus · Accepted Answer

The Answer of A company has the Cobb-Douglas production function  , where x is the number of units of labor, y is the number of units of capital, and z is the units of production. Suppose labor costs $200 per unit, capital costs $150 per unit, and the total cost of labor and capital is limited to $300,000. Find the number of units of labor and the number of units of capital that maximize production. ​
A) 1,500 units of labor; 2,000 units of capital 
B) 1,200 units of labor; 2,000 units of capital 
C) 1,500 units of labor; 400 units of capital 
D) 1,200 units of labor; 400 units of capital 
E) 12,000 units of labor; 4,000 units of capital

A Company Has the Cobb-Douglas Production Function , Where