1. Suppose the production function for a firm is given by Q = 2 KL. The firm's cost function is given by C = wL + rK.

(a) Find the marginal product of labor, MPL, and the marginal product of capital, MPK. (2 points)

(b) Do the marginal products of labor and capital exhibit diminishing marginal product? Explain (2 points)

(c) Assume capital, K, is fixed in the short run at some level, K . Find the firm's demand for labor, L in the short run. (2 points)

(d) Give your answer above, how does an increase in the rental cost of capital, r, affect labor demand? (1 point)

(e) Now assume the firm is in the long run so that capital and labor are flexible. Solve for the firm's input demand functions, K and L . (4 points)