1.

If the production function is –: Q = 8L1/2 + 20K1/2 where Q, L and K are output, labor and
capital respectively. Derive the equation of “expansion Path” if w = 1 and r = 5, where w and r are
input prices.

2. Define the return to scale of the following production functions:

I. Q= 2.5K0.8L0.2

II. Q= K0.5 L0.3

III. Q=0.3K0.7L

IV. Q= 23K0.5 L0.7

3. Suppose the production function of a firm is Q=K 0.4 L0.6 and the cost equation is C = 4K+2L. Find
out the firm’s optimal input combination to produce maximum output at a given cost of 100.

4. A farmer uses the following production function to grow wheat from a given plot of land.

Q= 6L – 0.5L2

I. If 8 family members are used, how much output is produced?

II. Show that the output will rise if 2 family members are withdrawn from the job.

III. Draw the total product curve for the following values of L: 1, 2,3,4,5 and 6.