The figure on the next page shows the long-run and short-run expansion paths as originally illustrated in Figure 9.17. Continue to assume that the price of labor is $40 per unit and the price of capital is $60 per unit. The manager is operating in the short run with 60 units of capital. Suppose the manager wants to produce 8,000 units of output.a. In the short run, the cost-minimizing input combination is_________ units of labor and_________ units of capital.b. The short-run total cost of producing 8,000 units is $_________ and ATC is $ _________per unit.c. If the manager plans to continue producing 8,000 units in the long run, the manager could lower the total cost of producing 8,000 units by $_________ by employing _________units of labor and _________units of capital.d. Construct the new short-run expansion path once the long-run adjustment in part c has been completed.

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120 Q =10,000 Expansion path (long run) Q3=8,000 73.33 Expansion path (short run) E 60 40 30 50 90 110 180 Labor (4) Capital (K)