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Question 1) Relate to the following information. A firm has production function F(K,L)=K^0.5L^0.5, and faces a...

Question 1) Relate to the following information. A firm has production function F(K,L)=K^0.5L^0.5, and faces a cost of labor of $5 per unit, and cost of capital of $20 per unit.

A) How much capital should the firm use to minimize cost if it wants to produce 100 units of output? (Set up a Lagrangian function where the cost function is the objective function and the production target is the constraint.)

B) How much labor should the firm use to minimize cost if it wants to produce 100 units of output?

C) What is the (minimized) cost of producing 100 units?

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