Question: 1. [25 Points] The production function of a rm is given by Q = 0.5531532 0.1m? 0.05.733 The prices per unit of 3:1 and :32

1. [25 Points] The production function of a rm is given by Q = 0.5531532 0.1m? 0.05.733 The prices per unit of 3:1 and :32 are ml and m2 respectively. This rm is interested in maximizing output given a budget constraint of M. (a) [5 Points] Write down the Lagrangian associated with this optimization. (b) [10 Points] Solve for the optimal values for 331 and m2. ((3) [10 Points] Assuming that the budget was increased by 10%, calculate (approximately) the increase in output given the new budget

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