1. Suppose a firm has the following production function = ^2*^2 . Calculate returns to scale. Does it have increasing, decreasing, or constant returns to scale?

2. Suppose a firm has following total cost function: = 100 + 2 + ^2 . Find the fixed cost (FC), total variable cost (TVC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC) for this firm.

3. Suppose a firm has following total cost function = 2 10 + 100. Find the value of q for which MC=ATC?

4. Suppose average total cost of 2 units is $40 and average total cost of 3 units is $35. What is the marginal cost of producing third unit?

5. Suppose rental rate (r) per unit of capital (K) is $100, and wage (W) per unit of labor (L) is $20. Graph the isocost line for a firm that is willing to spend $2000 on capital (K) and Labor (L).