Truffles are a tasty fungus traditionally located by trained pigs. Suppose the production function for truffles is given by Q = 2K^0.5L^0.5, where?L is the number of pig handlers and?K is the number of pigs.

a. Label the isoquants in the graph to reflect this production function.

b. Suppose that an improvement in pig genetics results in technological change so that now Q = 4.5K^0.5L^0.5. Relabel your production isoquants to reflect this change.

c. How must the technological change affect the cost of locating truffles? Assume that wages and rents are constant.

Transcribed Image Text:

Capital (K) Labor (L)