A firm has a production function of q = f(K, l.) = K + 0.5L, where K is capital and L is labor. Wages and rate of capital is w = 1 and r = 1. 1. Suppose you want to produce or = 200 which K and L minimizes costs? Draw isoquant and isocost. Show optimal choice. 2. Suppose that the government wants to encourage the use of labor and decides to pay for 50% of the firm's wage costs for the first 100 units of labor used i.e. the firm only pays 0.5w for the first 100 units of labor used. Again, assume that the firm wants to produce q = 200. What are all the possible combinations of K and L that minimize total cost? Draw the isoquant and isocost curves that correspond to the firm's optimal choice. Explain