Question: Assume that the production function q= LK, where L represents labor and K represents capital.Thus, marginal product of labor (MP L ) equals K and

Assume that the production function q= LK, where L represents labor and K represents capital.Thus, marginal product of labor (MP_L) equals K and marginal product of labor (MP_K) is L. In addition, assume that the price of labor is $20 per unit, and the price of capital is $5 per unit.

Does the production function exhibit increasing, constant, or decreasing returns to scale? Show your work and explain.

Find the expression for the marginal rate of technical substitution (MRTS, the slope of isoquant).

What is the cost-minimizing labor and capital when production (q) is 100?

A production function can be characterized by the following equation:

q = 50 + 20_L, where q is output per hour and L is amount of labor per hour.

Find the expression for marginal product of labor (MP_L) and average product of labor (AP_L).

What are MP_Land AP_L of the second unit of labor?

If workers earn $15 per hour, what is the marginal cost (MC) and average variable cost (AVC) of the tenth unit of labor?

3. Suppose a firm's average total cost (ATC) = (15/q) + 5 + 3q

a.Find the expression for total cost (TC), average variable cost (AVC), average fixed cost (AFC), and marginal cost (MC).

Calculate ATC, AVC, total fixed cost (TFC), and MC of producing 5 units of output.

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