Answer to Question #4506 in Microeconomics for Marcos
The Neo Corporation produces dream machines (software and hardware) that allows customers plugged in
to customize their dreams (e.g. you can be a pilot, or a martial arts expert). The Neo Corporation
production function is given by:
Q = 8L
where Q = output measured in number of dream machines,
L = labor measured in number of workers, and K = capital measured in number of mainframes. Neo
currently pays a wage of $400 per worker and considers the relevant rental price for capital to be $2500 per
Refer to Scenario 1. If Neo wants to produce 40 dream machines the optimal number of
workers to be hired is
a. Less than 2.
b. More than 2 but less than 4
c. More than 4 but less than 6
d. More than 6 but less than 8
e. More than 8
The answer is 8 but I don't know how.