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(Solved): 2. Given the production function q = 10K 1/2 L1/2(a) Plot at least 4 points on the q = 40 isoquant.( ...



2. Given the production function q = 10K 1/2 L1/2(a) Plot at least 4 points on the q = 40 isoquant.(b) Plot at least 4 points on the q = 80 isoquant.(c) Does this production function exhibit increasing, decreasing or constant returns to scale?(d) For this production the marginal product of labor (MPL) is: MPL = 5K1/2 L -1/2, and marginal product of capital (MP k) is: MPK = 5K -1/2 L 1/2. Find the marginal rate of technical substitution (RTS) at three points on your isoquant in part A). Is there a relationship between the RTS in parts A) and B) along a ray from the origin?(e) What is the cost-minimizing input combination for producing 40 units of out put if the wage rate (w) is 10 and the rental rate of capital is (v) is 40?



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