Question: Could you explain this with clear explanations? (g) (Points: 5) Set q = 2, r = $2, and w = $1. Draw a LK-diagram and

 Could you explain this with clear explanations? (g) (Points: 5) Set

Could you explain this with clear explanations?

q = 2, r = $2, and w = $1. Draw aLK-diagram and represent the isoquant 10(2), draw (L , K*), and thelong run isocost. Answer: (h) (Points: 1) How much is Cyr(2, 1,2,3) - C* (2, 1,2)? Explain the sign of this quantity. Answer:4.(POINTS: 35] The production of boats require a fixed proportion of workers

(g) (Points: 5) Set q = 2, r = $2, and w = $1. Draw a LK-diagram and represent the isoquant 10(2), draw (L , K*), and the long run isocost. Answer: (h) (Points: 1) How much is Cyr(2, 1, 2,3) - C* (2, 1,2)? Explain the sign of this quantity. Answer:4. (POINTS: 35] The production of boats require a fixed proportion of workers and machines. and the increase in the quantity of just one of the inputs cannot increase production. In particular for this rm. the ideal usage of inputs is 3 works for each machine, antir in case they use the input plan {LL} = [1,3], they will obtain exactly one boat. {a} (Points: 2} What is the production function for this rm? Answer: [b] (Points: 3} Set up the short run cost minimization problem when H = E. Answer: [c] (Points: 3} What is the set of feasible labor choices if K =: 1;? Explain. Answer: [:1] (Points: 3] Solve for the short run optimal amount of labor, L,,I[q] and for the short run minimized coot, C,,[q,w,r,K]. Answer: \f(f) (Points: 8) Setup the long run cost minimizetion problem and solve for the optimal input choices L"(q,w,r), K*(q, w,r), and the minimized cost C*(q, w, r)

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