Production of a good, Y , is given by KaL, where K is capital, L is labor, and a is a parameter (a > 1). A government-controlled firm is directed to maximize Y subject to meeting the constraint 2K + L = 12. (a) Solve the firm's problem. (b) Use the envelope theorem to find how the maximal amount of production Y changes as the parameter a varies

4. Production of a good, Y, is given by KaL, where K is capital, L is labor, and a, is a parameter (a > 1). A governmentcontrolled rm is directed to maximize Y subject to meeting the constraint 2K + L = 12. (a) Solve the rm's problem. (b) Use the envelope theorem to nd how the maximal amount of production Y changes as the parameter a varies