Problem
1. Suppose the short-run production function is q = L^0.5. If the marginal cost of producing the tenth unit is $5, what is the wage per unit of labor?
2. Can a Cobb-Douglas production function possess varying returns to scale? Explain! Assume that the Cobb-Douglas production function for a beer manufacturer is q=1.52L^0.6K^0.4.
3. Calculate the average fixed cost if we also assume that the firm's capital is fixed at 250 units and the rental rate of capital is $5 per unit.
4. Discuss and explain the situation involving the tangency between the isocost line and the isoquant.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.