Q5. Jason is running a cleaning business, there are available labours (L) and machines (M) for Jason to use as inputs to produce cleaning service for his clients. a) Suppose Jason must use both labours and machines without any specific ratio to complete the service for his clients, please write down the general production function formula for Jason. hint: you could use any letter if you want] b) Under the function form of a), assume Jason's Marginal Rate of Technical Substitution (MRTSL, M) equals to 2, how do you interpret it? c) Assume Jason now can use only single input, either labour or machine to complete the service, please write down the general production function formula for Jason. hint: you could use any letter if you want]
Q5. Jason is running a cleaning business, there are available labours (L) and machines (M) for Jason to use as inputs to produce cleaning service for his clients.
a) Suppose Jason must use both labours and machines without any specific ratio to complete the service for his clients, please write down the general production function formula for Jason. hint: you could use any letter if you want]
b) Under the function form of a), assume Jason's
c) Assume Jason now can use only single input, either labour or machine to complete the service, please write down the general production function formula for Jason. hint: you could use any letter if you want]
d) Under the function form of c), assume Jason's Marginal Rate of Technical Substitution (MRTSL, M) is always larger than the market price ratio between labour and machine (w/r), what should Jason do? why?
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