2) The general Cobb-Douglas production function for two inputs is given by: q = f (k, l) = AKªIB_where 0 0, fi > 0, fkk < 0, fu < 0 and frl = fix > 0. b.) Show that Eq,k Εα and Eq.l = B (Note that ɛ's are elasticities). C.) Show that, for this Cobb-Douglas function, production is CRS if a + ß = 1.
2) The general Cobb-Douglas production function for two inputs is given by: q = f (k, l) = AKªIB_where 0 0, fi > 0, fkk < 0, fu < 0 and frl = fix > 0. b.) Show that Eq,k Εα and Eq.l = B (Note that ɛ's are elasticities). C.) Show that, for this Cobb-Douglas function, production is CRS if a + ß = 1.
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.5P
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