a) An item is produced using two input factors. It is constant scale yield in production. The product is sold in a market with free competition ranse. One input factor is labor, the other is land....

Extracted text: a) An item is produced using two input factors. It is constant scale yield in production. The product is sold in a market with free competition ranse. One input factor is labor, the other is land. Demand for the item suddenly increases. Who will benefit the most from this the change: business owners, workers or landowners? NB! Here the answer is not obvious. You need to figure out how the answer is depends on the scarcity of resources, the substitutability between lom the input factors, whether there is competition in the commodity market, and short versus long term. b) An investor owns two companies. One company, A, produces aluminum minium. The other company, B, buys aluminum from A, paints this, and sells lacquered aluminum on to a world market with many competing companies. Company B pays company A a price q per kilo of aluminum. Company B sells lacquered aluminum for a price of per kilo. Company A's costs of producing x kilos of aluminum are given by the function: 1 СА (х) 3D X 2 2 where x is kilograms of produced aluminum. In addition to the cost of to buy aluminum, company B has the cost of varnishing x kilos aluminum, given by the function: С в (х) %3 2х