George produces computer software (user friendly). His firm's production function is Q= 1K + 2L, where Qis the programs, K is capital employed, and L is the labour used.

If George faces factor prices of Pk=8 and Pl =8, the cheapest way to produceQ =40is:

Part 1: By using how many units of capital?

Part 2:By using how many units of labour?

If George faces factor prices of Pk=5 and Pl=15, the cheapest way to produceQ =40is

Part 3: By using how many units of capital?

Part 4: By using how many units of labour?

In the competitive peanut butter industry, each of 1000 identical firms has a short-run marginal cost curve given by MC = 6 + q. The demand curve for this industry is: P = 12 - (2Q/1000).What is the: (Take answers out to two decimal places.)

1.Equilibrium Price

2.Equilibrium Quantity

3.Consumer Surplus

4.Producer Surplus

5.If an outbreak of aflatoxin suddenly makes it impossible to produce any peanut butter, what will be the short-run total loss in consumer and producer surplus?