Ellen sells smart phone apps. Her companys production function is f(x1,x2)=2x1+ x2, where x1 is the number
Question:
Ellen sells smart phone apps. Her companys production function is f(x1,x2)=2x1+ x2, where x1 is the number of unskilled workers and x2 is the number of skilled workers she employs. (a)In agraph(with on the horizontal axis and [2 on the vertical axis), draw a production isoquant representing input combinations that will produce y=10units ofoutput.(10 marks) (b)What is the technical rate of substitution TRS(x1,I2) for this production function? (10marks) (c)Let(w1,w2)be the prices of input 1 and input 2.What is the cost-minimizing input bundle ifw1=2andw2=5andifEllen produces 10 units? Illustrate your answer in adiagram with x1 on the horizontal axis and x2 on the vertical axis and explain the graph.(20 marks) (d)What are the conditional factor demands for input 1 and input 2 when Ellen produces yunits of output and w1=2 and w2=5?What is the firm's cost function c(w1 =2w2=5y)in this case?(10marks)