A. Long Run vs. Short Run (40 pts)
X=(1/2)L1/4K3/4, wL=$2, wK=$96
(dX/dL=(1/8)L-3/4K3/4,
dX/dK= (3/8)L1/4K-1/4
1.(2 pts)________________________________ For the point L=16 and
K=81, what isoquant are we on?
2.(3 pts)___________________________________ From this point
(L=16, K=81), to produce the same amount of X at a cheaper cost,
should we use more L and less K OR less L and more K? Explain.
3. (3 pts)_________________________________Find the equation for
the output expansion path.
4. (3 pts)_________________________________ Find the long run
total cost...