# 2.3 Cost Minimization - Practice Problems

Your firm can use labor \(l\) and capital \(k\) to produce output according to the production function: \[q=4lk\]

The marginal products are:

\[\begin{align*} MP_l &=4k \\ MP_k &=4l \\ \end{align*}\]

Suppose you need to produce 144 units, the price of labor is $10, and the price of capital is $40.

## 1.

What is the least-cost combination of labor and capital that produces 144 units of output?

## 2.

How much does this combination cost?

## 3.

Does this technology experience constant returns, increasing returns, or decreasing returns to scale?