Earl sells lemonade in a competitive market on a busy street corner in Philadelphia. His production function is f(x1, x2) = x1^1/3 x2^1/3, where output is measured in gallons, x1 is the number of pounds of lemons he uses, and x2 is the number of labor-hours spent squeezing them. a. Does Earl have constant, decreasing, or increasing returns to scale?
b. Let w1 and w2 denote the cost of a pound of lemon and the wage rate for lemon squeezers, respectively. Write down Earl’s cost minimization problem.
c. Solve Earl’s cost minimization problem.
d. What is Earl’s cost function?

Ryan is deciding between attending western state university and eastern state university. he cannot attend both universities simultaneously. both are fine universities, but the reputation of western is slightly higher, as is the tuition. let mu subscript upper e and mu subscript upper w be ryan's marginal utilities from attending eastern and western state universities respectively and upper p subscript upper e and upper p subscript upper w be the prices of attending eastern and western state universities. using the rule of consumer optimum, ryan will decide to attend eastern state university, if mue/pe exceeds muw/pw attend eastern state university if mue/pe is less than muw/pw attend western state university, if pe/mue< pw/muw attend western state university, since it gives him more utility.