Question 2. Isoquants and technological progress.

Frisbees are produced according to the production function

q=2K + L

where

q = Output of Frisbees per hour

K = Capital input per hour

L = Labor input per hour

a. (5 pt.) If K=10, how much L is needed to produce 100 Frisbees per hour?

b. (5 pt.) If K=25, how much L is needed to produce 100 Frisbees per hour?

c. (5 pt.) Graph the q=100 isoquant. Indicate the points on that isoquant defined in part a and

part b.

d. (10 pt.) What is the RTS along this isoquant? Explain why the RTS is the same at every point

on the isoquant.

e. (5 pt.) Graph the q=50 and q=200 isoquants for this production function also.

f. Suppose technical progress resulted in the production function for Frisbees becoming

q=3K + 1.5L

(15 pt.) Answer part a through part d for this new production function.

(5 pt.) Discuss how it compares to the previous case.