2wrQ Suppose the long-run cost function is given by: C(w.r. Q) =, (w+r) What would be the conditional demand for labor and capital respectively? O 2r2Q 2w2Q (w+r)3' (w+r)3 2rQ (w+r)²' (w+r)² 2wQ (w+r)? (w+r)? 2r2Q 2w2Q (w+r)²’ (w+r)²

Assume that housing output is a function of the quantities of capital (k) and land (l) employed by adeveloper, y = h(l, k), where h( ) is the housing production function. Also, assume that the developer’slong-run cost function is c = rl + ik, where r = price for a unit of land and i = price for a unit of capital.(a) Draw an arbitrary cost-minimizing scenario for this developer using isoquants and iso-costlines. Identify the cost-minimizing bundle as (l*, k*). Be sure to plot k along the y-axis. Pleaselabel your graphs. 5pt(b) Within a city, the price of capital, i, does not typically vary with a development’s distance fromthe city center. However, the price of land traditionally declines as distance from the centerrises. Using the cost-minimizing framework set up above, show how homes’ capital-to-landratios likely change as distance to the city center rises, holding housing output fixed. 5pt(c) Does your answer from above do anything to explain the differences in the types of homes…

I don't believe part (b) was fully answered. Can you please solve it with more detail?

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