Problem 1 [10 points] A political campaign manager must decide whether to emphasize television advertisements or letters to potential voters in a reelection campaign. a. Describe the production function for campaign votes. [5 points] b. How might information about this function (such as the shape of the isoquants) help the campaign manager to plan strategy? [5 points] Problem 2 [30 points] We assume that wheat is produced according to the production function q = 100 (10-8 10-2 ), where K is capital input, and L is labor input. a. Beginning with a capital input of 4 and a labor input of 49, show that the marginal product of labor and the marginal product of capital are both decreasing. [20 points] b. Does this production function exhibit increasing, decreasing, or constant returns to scale? [10 points] Problem 3 [60 points] Suppose life expectancy in years (L) is a function of two inputs, health expenditures (H), and nutrition expenditures (N) in hundreds of dollars per year. The production function is L = c H0.8 10.2. 1. Beginning with a health input of $400 per year (H =4) and a nutrition input of $4900 per year (N = 49), show that the marginal product of health expenditures (MPH ) and the marginal product of nutrition expenditures (MPN ) are both decreasing. [20 points] 2. Does this production function exhibit increasing, decreasing, or constant returns to scale? [10 points] 3. Suppose that in a country suffering from famine, N is fixed at 2 and that c = 2. Plot the production function for life expectancy as a function of health expenditures, with L on the vertical axis and H on the horizontal axis. [10 points] 4. Now suppose another nation provides food aid to the country suffering from famine so that / increases to 4. Plot the new production function. [10 points] 5. Now suppose that N = 4 and H = 2. You run a charity that can provide either food aid or health aid to this country. Which would provide a greater benefit: increasing H by 1 or N by 1? Explain. [10 points]