I cannot do section 'b'. Could you help me to solve it? The question is - Assume for now that the rental rate of labour increases to 100 per unit. Illustrate on your isoquant map the substitution effect stemming from the change in factor prices.

Question 82 A firm which is both price-taking and factor-price-taking firm can produce a single output at using inputs labour (1) and capital (k) according to the homothetic production function: 1 1 x = f(l,k) = 50l3k7: The firm must pay a wage (w) for each unit of labour employed and pay rent (r) for each unit of capital used in production. a) Assuming that the wage (w) paid to labour is 50 and the rental rate of capital (r) is 200: i) Sketch the firm's isoquant and iscocost map (with labour on the horizontal axis and capital on the vertical) (3 marks) ii) Clearly indicate the firm's output path which represents the set of cost minimising production plans (3 marks) b) Assume for now that the rental rate of labour increases to 100 per unit' Illustrate on your isoquant map the substitution effect stemming from the change in factor prices (6 marks)