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Please. Note: make sure draw the graphs and label everything clearly! You will need to upload your answers. Assume Guido's Guitars produces guitars with the
Please.
Note: make sure draw the graphs and label everything clearly! You will need to upload your answers. Assume Guido's Guitars produces guitars with the following weekly production function: 9 = (L) 1/4 (K) 1/2 Guido rents capital at a price of $48 per day and pays a wage of $24 per day to his laborers. [1] A) If Guido is currently employing 16 workers and 36 units of capital, what is his total output? Explain. [2'] B) With K = 36 and L = 16, what is Guido's current Marginal Rate of Technical Substitution (MRTS)? Explain. [5] C) Derive his MC equation, as a function of q (again assuming K = 36). Make sure you show each step of derivation. [4] D) If Guido hired you as an economic consultant, would you advise him in the long run to change his input mix (assuming he will still want to produce the same level of output)? Explain the economics of your advice using a graph describing Guido's production and cost situation (isocost and isoquant).
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