Suppose the firm's production function is given as Q = 10KL , where L is labor, K is capital.

1) Calculate the elasticity of substitution of this production function. (5marks )

2) What is the equation of the isoquant corresponding to this production function? (5marks )

3) What type of return to scale does this production exhibit? And Why? ( 5marks )

4) Derive the long run total cost function. (5 marks)

5) What is the long run average and marginal cost functions? (5 marks)

6) Suppose that capital is fixed at a level K . What is the short run total cost function for this production function. (5 marks)

7) What is the short run average variable cost and short run average fixed cost functions? (5 marks)

8) Suppose that the price of labor w=$5 and the price of capital r =$20. What is the cost minimizing input combination if the firm wants to produce 50 units? ( 5 marks)