1. Consider the production functions for good X and good Y: X = K? +L ; Y = 20/KL A. Show and discuss which production function(s) exhibit(s) diminishing marginal productivity of labor and capital. B. Show and discuss which production function(s) exhibit(s) diminishing MRTSLK. C. Suppose capital and labor are doubled, solve for the returns to scale of each production function, and interpret your results.

1. Consider the production functions for good X and good Y: X = K? +L ; Y = 20/KL A. Show and discuss which production function(s) exhibit(s) diminishing marginal productivity of labor and capital. B. Show and discuss which production function(s) exhibit(s) diminishing MRTSLK. C. Suppose capital and labor are doubled, solve for the returns to scale of each production function, and interpret your results.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.2P

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