1) The production function for widgets is given by q= K ^0.75 L^0.25

Derive the expression for the MRTS. Does the MRTS vary as you move along an isoquant? Show. What is the value of MRTS if K=2 and L=4? What does that number mean? MRTS= MRTS (at K=2 and L=4)=

2) The production function for widgets is given by q=KL(0.6)K^2 (0.2)L^2

Is this production function subject to constant, increasing or decreasing returns to scale? Demonstrate

3) In Feb. 2003, Circuit City Stores, Inc. replaced skilled sales representatives who earn up to $54,000 per year with relatively unskilled workers who earn $14 to $18 per hour (Wall Street Journal June 18, 2003). Suppose the sales representatives sell one particular Sony high definition TV model. Let q represent the number of TVs sold per hour, s the number of skilled sales representatives per hour, and u the number of unskilled sales representatives per hour. Working eight hours per day, each skilled worker sells six TVs per day, and each unskilled worker sells four. The wage rate of the skilled worker is ws=$26 per hour and the wage rate for the unskilled worker is wu=$16 per hour.

Write the expression for the production function. Draw the isoquant for q=4 with both skilled and unskilled sales representatives.