If a firm’s production function is Leontief and the wage rate goes up the

Managerial Economics

If a firm’s production function is Leontief and the wage rate goes up the

Firm must use more labor in order to minimize the cost of producing a given level of output
Firm must use more capital in order to minimize the cost of producing a given level of output
Firm must use less labor in order to minimize the cost of producing a given level of output
Cost minimizing combination of capital and labor does not change

If a firm's production function is Leontief and the wage rate goes up the cost minimizing combination of capital and labor does not change.

Tags: The Production Process and Costs