Question

1. (a) Based on the production function: Q = 2K1/2L1/2, please draw the isoquant with Q=10....

1. (a) Based on the production function: Q = 2K1/2L1/2, please draw the isoquant with Q=10.

(b) Given r=1; w=2, please draw the isocost with TC=27, on the same graph.

(c) Based on the isoquant and isocost curves you drew, is TC=27 the cheapest cost of producing Q=10? Is Q=10 the maximum quantity given TC=27? Explain.

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