Question: 4. Cost minimization: A firm has a technology given by y == ric. The factor prices are W1 = 1, w2 - 2. (a) Determine

4. Cost minimization: A firm has a technology given by y

4. Cost minimization: A firm has a technology given by y == ric. The factor prices are W1 = 1, w2 - 2. (a) Determine the MRTS (x1, 12) and use it together with the production function to solve for the conditional factor demands for a cost minimizing firm. Show this cost minimizing point on a graph in 1 - 12 space using a given isoquant. (b) Solve for the firm's cost function given your conditional factor demands. Determine the associated average and marginal costs. (c) Does this technology have constant, increasing or decreasing returns to scale? Explain

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