Suppose the production function is given by Q = 2K + L.If w = $4 and r = $4,how many units of K and L will be utilized in the production process?
A) All K and no L.
B) All L and no K.
C) Equal amounts of K and L.
D) A combination of K and L not represented above.

Question

Quizplus · Accepted Answer

The production function Q = 2K + L suggests that capital (K) is twice as productive as labor (L). Since the cost of both inputs is the same (w = r = $4), it is more efficient to use only capital (K) to maximize output for the same cost.

Suppose the Production Function Is Given by Q = 2K