Kent sells lemonade in a competitive market on a busy street corner. His production function is F(L,K) = L^1/3K^1/3. where output q is gallons of lemonade, K is the pounds of lemons he

uses and L is the number of labour-hours spent squeezing them. The corresponding marginal products MP_L= (1/3)L^1/3K^-2/3. Every pound of lemons cost is r and the wage rate of lemon squeezers is w.

a. Does this production process have increasing, decreasing or constant returns to scale, show this.

b. On a graph with hours lemon-squeezing (L) on the horizontal axis and the pounds of lemons (K) on the vertical axis, illustrate an isoquant that represents a particular production level q, what is the equation of the isoquant?

c. What is the equation for a slope of an isoquant? Is it constant? What does the slope indicate?