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Problem 1 Ms. Fox can produce artificial Fur coats using the services of labor and equipment according to the production function q(L,K)= L1/3K2/3 . a) Does this production function display increasing, constant, or decreasing returns to scale? Last week, Ms. Fox has signed and pre-paid a one-year lease for eight machines. Per day, the cost of rental of each machine is 15100. b) Substitute the number of machines in Ms. Fox's production function to nd the expression of Ms. Fox's Short Run production function qSR(L)- c} In the short run, how many units of labor does Ms. Fox need to employ to produce 20 articial fur coats? Explain your reasoning. d) In the short run, how many units of labor does Ms. Fox need to employ to produce (1 articial fur coats? e) Compute Ms. Fox short run (daily) Fixed Cost iMrs. Fox pays each worker daily wages for $240. f) Compute Ms. Fox short run Variable Cost as a function of her output q. g) What is the expression of Ms. Fox's Marginal Cost function MC(q)? h) Compute the expressions of Ms. Fox's Average Total Cost ATC(q) and Average Variable Cost (AVC). i) In a diagram, plot Ms. Fox's AVC, ATC, and MC curves