2. Production and the Cost of Production [25 Points] Suppose the production function of a firm producing books is given by q=10K0.5L0.5 a. Explain whether the above production function exhibits constant, increasing or decreasing returns to scale! [5 points] b. If the firm wants to produce 200 units of books, with the wage level is $10 /day and rental cost is $40/ day, calculate: i. the cost-minimizing level of K and L [5 points] ii. the total cost of production [ 5 points] c. Using a graphical analysis and in words, explain how a new advance technological change will change the cost-minimizing level of K and that are needed to produce the same level of output of 200 units! [10 points] 2. Production and the Cost of Production [25 Points] Suppose the production function of a firm producing books is given by q=10K0.5L0.5 a. Explain whether the above production function exhibits constant, increasing or decreasing returns to scale! [5 points] b. If the firm wants to produce 200 units of books, with the wage level is $10 /day and rental cost is $40/ day, calculate: i. the cost-minimizing level of K and L [5 points] ii. the total cost of production [ 5 points] c. Using a graphical analysis and in words, explain how a new advance technological change will change the cost-minimizing level of K and that are needed to produce the same level of output of 200 units! [10 points]