Business, 19.01.2021 19:10 glitterpanda2468

A firm buys two inputs, labor L and capital K, the total amount of which cannot exceed 100 units. The wage is $8, and the rental rate of capital is $10. The firm can, at most, spend $840 on the two inputs. This data can be summarized in the following equations: Input limit. K + L = 100
Budget limit: 8L + 10K = 840
What are the quantities of two inputs the firm must buy in order to produce a maximum output, given input and budget constraints?
LE=
K=

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Answer from: liyahheadhigh

Input limit: K + L = 100

Budget limit: 8L + 10K = 840

L = 80

K = 20

See below

Explanation:

With regards to the above, we need to develop equations and put in function of one of the variable , say with L(labor)

Input limit

K + L = 100. Equation 1

Budget limit

8L + 10K = 840 Equation 2

From equation 1, make K subject of the formula

K + L = 100

K = 100 - L

Substitute for K in equation 2

8L + 10K = 840

8L + 10(100 - L) = 840

8L + 1,000 - 10L = 840

8L - 10L = 840 - 1,000

-2L = -160

L = 80

We can also get the value of K by substituting for L in equation 1.

K + L = 100

K + 80 = 100

K = 100 - 80

K = 20

Since we have the optimum K, we can replace in any of two equations to find the optimum L,

Also, we will replace the input limit and budget limit equation to verify

Input limit

K + L = 100

20 + 80 = 100

Budget limit

8L + 10K = 840

8(80) + 10(20) = 840

640 + 200 = 840

840 = 840

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

Answer from: Quest

you have to put the parentheses like this:

$(85-4) \div 9 \times 10$

in fact, you have to perform the operation inside parentheses first, and then proceed in order:

$81 \div 9 \times 10 = 9 \times 10 = 90$

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A firm buys two inputs, labor L and capital K, the total amount of which cannot exceed 100 units. Th...

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