1. (15 points) The Zany Florist is a firm operating in the florist industry in Toronto, Ontario operating in pure competition. Suppose the production function for Zany is given as y = f(k, l)= 2k /3125, where k is capital and / is labour. If prices of capital and labour are w2 = px = 1 and w1 =p1= 16, and the price of output p = 12. Answer the following a) Does the technology for Zany exhibit constant, increasing, or decreasing returns to scale in production? b) Find the marginal product of each factor (labour and capital) and the (marginal) rate of technical substitution. Show that both labour and capital exhibit diminishing marginal product. c) Suppose Zany has a fixed amount of capital such that, k = 8. Find the conditional input demands, the quantity of output produced, and firm's profit. Illustrate graphically