5. (BONUS 10 points) One of the inputs for completing (producing) your homework is pens. You use either
Sharpies (S) or Bic pens (B). Assume that the homework production function is $q = 2S + B$, where q is the
problem sets, S is the number of Sharpies, and B is the number of Bic pens. Further, assume that the cost of a
Sharpie is $3 per pen and the cost of the Bic pen is $1 per pen.
a. (2 pts) Draw the isoquant for 8 problem sets. Place B on the vertical axis and S on the horizontal axis.
b. (1 pt) What is the MRTS of S for B (i.e., the number of Bic pens given up for an additional Sharpie)?
c. (1 pt) What is the relative price of a Sharpie in terms of a Bic pen?
d. (2 pts) What is the relationship between the relative price of a Sharpie in terms of a Bic pen and the MRTS of
S for B? (Hint: less than or greater than.) Are the isocost lines steeper or flatter than the isoquant for 8 problem
sets?
e. (4 pts) What input combination ($S^*$, $B^*$) minimizes the cost of 8 problem sets? Show your choice in your
graph from part (a), including the relevant isocost information.
