Question 1 Consider the production function: F(L, K) = L%K%. Suppose the wage rate (price per unit of labour), w, is 1 and, the capital rental rate (price per unit of capital), 7", is 2. (a) Does this production function exhibit increasing, decreasing or constant returns to scale? Justify your answer. (b) (If you would like to, you can do part (c) rst and use your answer to (c) to answer this question.) Find the total cost of producing 32 units of output. (c) Find the total cost, average cost and marginal cost of producing y units of output. Is the average cost increasing or decreasing in y? Is the marginal cost higher or lower than the average cost