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2. Tiva has a crafts store that makes jewelry using beads (1] and copper (C). Her production function for jewelry is given by Q =
2. Tiva has a crafts store that makes jewelry using beads (1] and copper (C). Her production function for jewelry is given by Q = plac04 Suppose she can buy beads and copper at prices Py and Po, respectively. (a) Calculate Tiva's marginal rate of technical substitution between B and C. (b) Does this production function have increasing, constant, or decreasing returns to scale? Explain.(c) Set up the oost minimization problem you would use to calculate Tiva's cost function C(Q) in Lagrangian form. (Note: You do not need to solve it or derive rst order conditions. Suppose Tiva decides to branch out in her jewelry offerings by getting a 3D printer. The cost of producing new 3D printed jewelry is 2 q@=%+% For the rest of this problem1 assume Tiva can produce fractions of jewelry1 don't worry about restricting your answers to whole numbers. (d) Compute Tiva's marginal cost and average cost of production for 3d printed jewelry
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