1. (30 points) The production function for cars is f(K,L)=2L+K, where L is the amount of labor used and K the amount of capital used. 1.1 Does this technology demonstrates increasing, decreasing or constant returns to scale? Show mathematically and explain. 1.2 Does the marginal product of labor, MPL, increases, decreases or remains constant? Explain. 1.3 In the short run, capital is fixed at 4 units, and labor is variable. On a graph with horizontal axis being labor, and vertical axis being output (cars), take different values for labor inputs, and draw the following: - The output as a function of labor input in the short run. Label the line "Output" - The marginal product of labor as a function of labor input in the short run. Label the line " MPL " - The average product of labor as a function of labor input in the short run. Label the line " APL". (Hint: The APL is defined as the total output divided by the amount of labor input.) 1. (30 points) The production function for cars is f(K,L)=2L+K, where L is the amount of labor used and K the amount of capital used. 1.1 Does this technology demonstrates increasing, decreasing or constant returns to scale? Show mathematically and explain. 1.2 Does the marginal product of labor, MPL, increases, decreases or remains constant? Explain. 1.3 In the short run, capital is fixed at 4 units, and labor is variable. On a graph with horizontal axis being labor, and vertical axis being output (cars), take different values for labor inputs, and draw the following: - The output as a function of labor input in the short run. Label the line "Output" - The marginal product of labor as a function of labor input in the short run. Label the line " MPL " - The average product of labor as a function of labor input in the short run. Label the line " APL". (Hint: The APL is defined as the total output divided by the amount of labor input.)