Assume a firm uses labor and capital to make shoes. They pay workers a wage (w) and

the cost of capital is r. Let w equal $1.00 and r equal $1.00. Show what happens to labor demand when the following occur. Start with nice convex isoquants. Show your work using graphs.

1.The wage triples.

2.Assume a production function of the form, Q = 2*L + 2*K. Start with initial wage and cost of capital. Resolve the equilibrium and then let the wage triple, ceteris paribus.