Question: 4. The production function for a product is given by q = 100KL, where K = capital and L = labour). The marginal products of

4. The production function for a product is given by q = 100KL, where K = capital and L = labour). The marginal products of labour and capital are; MPL = 100K and MPK = 100L. Assume, that the isoquant is drawn with labour on the horizontal axis and capital on the vertical axis. If the price of capital is $120 per day and the price of labor $30 per day, (a) Calculate the optimal amounts of labour and capital to produce 1000 units of output. (10 marks) (b) At the optimal amounts of L and K you found in part (a), calculate the total cost. Is this a cost minimizing solution? Explain

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