Question: 1. A firm has the production function q = min(L; K) (Assume tha the factor prices are w; r). (a) Find the long-run cost function

1. A firm has the production function q = min(L; K) (Assume tha the factor prices are w; r). (a) Find the long-run cost function (b) What kind of returns to scale does this production function exhibit? Explain. (c) Find AC (q). (d) What kind of scale economies(economies of scale, no economies of scale, diseconomies of scale) does this production function exhibit? Explain.

2. A fim has the production function q = p LK (Assume tha the factor prices are w; r). (a) Find the long-run cost function (b) What kind of returns to scale does this production function exhibit? Explain. (c) Find AC (q). (d) What kind of scale economies(economies of scale, no economies of scale, diseconomies of scale) does this production function exhibit? Explain.

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