Suppose a rm’s producion functionisgiven by f(x1;x2) = minf2x1 + x2;x1 + 2x2g.
(1) Sketchthe associatedisoquant map;
(2) Find the rm’s conditionalfactor demand functions x1(w;y) and x2(w;y).
The changein cost-minimizinglaborinputinduced by anin nitesimalchangein
therentalrateequalsthechangein thecost-minimizing capitalinputinduced by
anin nitesimalchangeinthe wagerate.