Floppy Corp Produces Software Using Two Inputs, Large (700 MB)discs

question 47

Essay

Floppy Corp produces software using two inputs, large (700 MB)discs, L, and small (210 MB)minidiscs, S. Its production function is given by: Q = (L/2)+ S where Q is output.
i)Does the production function exhibit constant, increasing, or decreasing returns to scale?
ii)Draw isoquants for Q = 2 and Q = 3. What is the firm's marginal rate of technical substitution?
iii)Suppose small disks cost $3 each and large disks cost $1 each. How many of each type of disk will Floppy Corp use to produce Q = 2? Q = 3?
iv)What is the firm's cost function when small disks cost $3 and large disks cost $1?

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Definitions:

Solar Energy

Energy from the sun that is converted into thermal or electrical energy.

Kilocalories

A unit of energy equal to 1,000 calories, commonly used to express the energy content of food.

Trophic Level

Feeding level of one or more populations in a food web.

Detritivores

Organisms that feed on dead organic material, particularly plant detritus, playing a crucial role in nutrient recycling.