A firm that manufactures office desks has the following production function in the short run:

Q = 400 L^0.8 K^0.5

where

Q = the quantity of chairs produced in a month

L = the amount of labor (hours of work) used in a month

K = the amount of capital (building, machines, equipment) used.

Assume that in the short run L = 1,000 and K = 100.

1.What is the quantity produced if L = 1,000 and K = 100? (5 points)

2.What is the quantity produced if L = 1,200 and K = 100? (5 points)

3.What is the quantity produced if L = 1,400 and K = 100? (5 points)

4.Does the law of diminishing marginal returns to labor apply to the production process? Why? Why not? (5 points)