Question: Suppose that the production function for owner-operators in the trucking sector of the motor carrier industry required that capital and labor be used in fixed proportions: one driver with each truck

a) Identify the production function for owner-operator services and graphically depict the set of isoquants for this production function

c) Draw a graph (s) to identify the optimal use of capital and labour for a given set for labour and capital input prices, w and r, respectively. What effect on the optimal capital: labour ratio will occur if the relative labour wages increase by 10%, all else held constant?