1. Table 1 below shows information derived from a classical production function. The price of the inputs is K60 per unit while the price of the output is K200 per unit. If the total fixed cost is K2000. a. Complete the table below b. Calculate the optimal level of production. Input X Output Y Total Costs Total Value Product Total Profit 0 0 3 3.7 6 13.9 9 28.8 12 46.9 15 66.7 18 86.4 21 104.5 24 119.5 27 129.6 30 133.3 33 129.1 Q2. a. Define an Isoquant and draw the Four types of Isoquants representing different input substitutions. b. Calculate the Least Cost Combination of inputs for an output of 210 units, given that PX1 = K4 and PX2 = K6, based on the equation of the Isoquant given below; Y = 16 X X 2 + 12 X X 2 1122 1 Q3 With the use of a suitably labeled diagram, briefly discus the relationship between the short run cost curves (SRMC, SRATC) and long run cost curve with different plant size (plants 1 to 4) and show the position of plant 3 as an the optimal plant size. Q4. a. Calculate the present value of a forest land worth K200,000 to be received at the end of ten years if the discount rate is 5%? b. Suppose a farmer who has the opportunity to buy a farm land for 200,000 and sign a contract now to sell the farm land for K300,000to someone else at the end of five years. Would you advise the farmer to to ahead and buy this farm land? 2