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Hello everyone! Welcome to GeeklyEDU by GeeklyHub Economics! In this video we'll discuss the Lagrangian cost minimization problem, once again with the help of the two-input Cobb-Douglas production function. We are going to use formula that involves productivity, capital, capital share and wage, find partial derivatives, solve for the lambda, find relationship between Capital and Labor and then plug in the numbers into functions. This is an important problem when considering the best combination of inputs to achieve a certain output while minimizing costs. Going through the whole process of solving this type of problems and having each step explained, you'll easily understand and apply those while solving your problems on college Economics test. Watch the video to learn more!
0:00 Intro
0:18 Production Function
0:36 Minimization function
0:56 Example problem: how to minimize total costs while having a fixed output?
1:34 Lagrangian for cost minimization function
1:59 5 steps to solve the problem
2:36 Find partial derivatives
2:52 Solve for lambda
3:11 Find relationships between Capital and Labor
3:53 Plugging in numbers into production function
4:20 Plugging in numbers into cost function
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#college_economics #Lagrangian_cost_minimization #CD_function #geeklyhub
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