. (7 points) A seller in a competitive market has a production function y = f (L, K) = 5+k/2. This function is strictly increasing in the inputs, concave and

differentiable. You do not need to check this. (a) (2 points) In the short run, the input K is fixed at 100. Find the short run cost function of output y when the prices of the inputs are p,2 and pg = 2. (b) (1 point) Use the short run cost function to calculate the short run average cost and marginal cost functions. (c) (2 points) Now suppose that both K and L can be chosen at any non-negative level. Find the cost minimizing bundle of inputs to achieve the output y = 50 with the same input prices p, = 2 and px = 2 (d) (2 points) If the output level is still y = 50, but the input prices are now Pi = 2and pg = 6, then what is the cost minimising bundle of inputs?