Principles of economic theory

Principles of economic theory, question consist of 6 parts, question paper attached. Use of MS office Excel, diagrams, algebra.
Topic category: Economics

In Eurcadia, there are two types of vehicle for transporting goods: vans and boats. Seven people manufacture boats or vans; and ten machines are used to make boats or vans. The number of boats made in Eurcadia is given by the production function Nboats = 1.7 K0.7 L0.4
where K is the number of machines used to make boats, and L the number of employees who make boats.

Part (A)
Does the production function for boats imply increasing or diminishing returns to scale? (explain how we can tell). Calculate the number of boats which can be made, in each cell of this table, rounded to the nearest whole number:
L=0 L=1 L=2 L=3 L=4 L=5 L=6 L=7
K=10
K= 9
K= 8
K= 7
K= 6
K= 5
K= 4
K= 3
K= 2
K= 1
K= 0
(10 marks)

Part (B)
Make an ‘Edgeworth box’ diagram for production of boats in Eurcadia: put the number of employees making boats on the horizontal axis (0 to 7), and number of machines used to make boats on the vertical axis (0 to 10). Using data from Part (A), draw an isoquant line for 7 boats. On the same diagram, add an isoquant for 11 boats.
Part (C)
If an employee doesn’t work on boats, s/he works on vans; machines not used for boats are used for vans. The production function for vans is:
Nvans = 4 K0.5 L0.26
In the same ‘Edgeworth box’ as Part (B), add an isoquant for 10 vans. Add an isoquant to represent 14 vans, on the same diagram. Explain how this ‘Edgeworth Box’ shows efficient combinations of people & machines.