Question: Company A builds and sells widgets. It uses two inputs, labor (L) and capital (K). The production function for widgets, W, is given by

W = 5L ^1/2 K.

1. Complete the following table showing the amount of W produced with each combination of inputs.

   	K=0	K=1	K=2	K=3	K=4	K = 5
   L = 0
   L = 1
   L = 2
   L = 3
   L = 4
   L = 5

2. Does the production function for widgets exhibit decreasing, increasing, or constant returns to scale? Explain your answer.
3. Are the marginal products of K and L increasing, decreasing, or constant? Explain.
4. Assume the price of labor is $50 and the price of capital is $100, what are the short run total, average, and marginal cost curves assuming capital is fixed at 2 units?

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document