Question 1: Consider the production function Y = 2 L% K% a) b) c) d) e) f) g) h) i) i) Plot the isoquant curve corresponding to Y = 100 units of output using some graphing software. What returns to scale does this production function exhibit? Are the marginal returns to labor increasing decreasing, or constant for this function? Table 1 provides the cost-minimizing inputs for several different output levels if labor costs $5 and capital costs $10. Fill in the missing values in the first 4 rows. Table 1 Y K | L Total Cost 17 | 601 | 1202 | 34 | 12020 24042 68 | . 48.08 480.83 75 | 2652 | 53.03 100 Using the prices from part d, what is the minimum amount the firm must spend to produce at least 100 units of output? Record your answer, along with the optimal L and K values in Table 1. Answers within $20 of the actual value will be accepted. Hint: one way to solve this problem is to guess and check using graphing software. Plot and label the isocost line corresponding to your answer in part d on your graph from part a. The price of Lincreases to $10. Will the minimum cost to produce 100 units of output increases or decrease due to this price increase? By how much? Answers within $40 of the actual value will be accepted. Plot and label the new isocost line corresponding to your answer in part g on your graph from part a. Calculate the marginal cost between each row in Table 1. What pattern do you notice? The firm faces a demand function D = 100 - 3p. This means the marginal revenue the firm faces as a function of units sold (qg) is MR(q) = % - Eq. Based on this, and your