Linda sells an android app. Her firm’s production function is f (x1, x2) = x1 +...

Linda sells an android app. Her firm’s production function is f (x1, x2) = x₁ + 2x₂ where x₁ is the amount of unskilled labor and x₂ is the amount of skilled labor that she employs.

Draw the isoquant at 20 units of output and another at 40 units of output.
Does this production function exhibit increasing, decreasing, or constant return to scale?
If Linda faces factor prices (w1, w2) = (1, 1), what is the cheapest way to produce 20 units of output?
If Linda faces factor prices (w1, w2) = (1, 3), what is the cheapest way to produce 20 units of output?

Expert Solution

Rahul Sunny answered 8 months ago

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