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step by step explanations please! Q21. A small mining company in Mogok specialises in production of Painite and has the following log-production function: an =

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Q21. A small mining company in Mogok specialises in production of Painite and has the following log-production function: an = $an + glnL, where Q is hourly output in grams, K is capital and equipment used in production measured in certain aggregate units and L is the number of employees (fractions, e.g. 0.5, represent part-time employment). The hourly price ofa unit of capital is r = 2.5 thousand Burmese Kyat, the hourly wage is w = 3 thousand Burmese Kyat. The company is able to attract funding that allows them to spend up to B = 75 thousand Burmese Kyat per hour. Because Painite is so rare there are only 1, = 20 people in the whole country who have the required qualication. The company is not considering workers from overseas because of the lack of expertise in visa issues. A) Find the output maximising combination of K and L. [5 marks] B) Changes to the public healthcare system lead to a reduction in the wages that the firm is required to pay their employees. The new rate is wn = 1. Find the new optimal combination of capital and labour. [2 marks] C) Is there a combination of parameter values in this problem that would make the budget constraint slack? If yes, find those values? If no, explain why. [3 marks]

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