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Question: 4 duane breeds parrots for a living he has discovered...

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4. Duane breeds parrots for a living. He has discovered that the production function parrot chicks (Q) is: The price of K is $8 and the price of L is $2. a) Write the function of marginal products MP and MPk. b) Are the two inputs perfect complements, perfect substitutes, or imperfect substitutes? c) Does this production function exhibit constant, increasing or decreasing returns to scale? Explain. d) Write the function of average product of labour. e) Does labour obey the law of diminishing returns? Explain. f) Suppose that Duane wants 144 parrot chicks, how much K and L should be employed to minimize costs, and what is the cost of producing 144 parrot chicks? g) Suppose that Duane is faced with the same problem as in () except that he has a fixed amount of K. In fact, K 16. How much L should be employed to minimize costs. and what is the total cost?
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