B. Applications 1. A firm's production function is given by Q = 1010.4106 where L is the quantity of labour employed and K is the quantity of capital employed. The price of labour is E8, and the price of capital is E4. a. If the producer's costs are constrained to E400 find the maximum level of production of the firm. b. If the cost constraint is relaxed and the producer can now spend E800, what effect will this have on the optimal level of production