Suppose a restaurant produces meals (M) using two production inputs: kitchen equipment (K) and cooking staff (L). The maximum number of meals the restaurant can produce with these inputs is the result of a technological process described by: M = K1/2L 1/4

(a) What are the marginal products of equipment and staff? Are these marginal products diminishing?

(b) Find the MRT SL,K

(c) Plot the following three points {L, K} on a figure and represent them with carefully labeled isoquants: A = {6, 9}; B = {16, 1}; C = {8, 4}.

(d) Does this production function exhibit Constant, Increasing or Decreasing returns to Scale?

(e) Suppose the restaurant manager wants to choose L and K to minimize costs in the Long Run. Draw an approximate figure that illustrates the optimal choice. drawing should have at least one isoquant and at least one total cost curve.