3. Calculate th elasticity of substitution for the production function
Derive the long-run cost function for the constant elasticity of substitution production function q = (Lρ + Kρ)d/ρ Please explain the math to this. I don't understand the derivation of this.
2. Marginal products, RTS, and elasticity of substitution: Consider the following production function: q=k *11/4 a. For some w, y, use the Lagrangean method to derive demand functions by finding the cost-minimizing combinations of k and I in terms of q, w, and y (so the cost function is the objective function, and the production function is the constraint). (10 points) b. What is the rate of technical substitution (RTS) for this function? (5 points) C. Presume that the firm...
Solve for the elasticity of substitution for the following production function using calculus: y = ((a^p)+(b^p))^k/p
Consider the constant elasticity of substitution (CES) production function F(xi, x2) A (ao lix;" + a2x3)'/ρ. Show that F has constant returns to scale when 10-0.
5. For this problem you will analyze the elasticity of substitution and the isoquant graphs for the following production function F(K.L) = 2K1/2 1/2 (a) Graph the isoquant for F(K,L) that represents an output of 10. Be sure to show your work and label the axes clearly. Also, two points should be clearly labelled. (3 points) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 (b) What is the...
Derive the elasticity of substitution for the Cobb-Douglas production Fonction. f(L,K) = ALαKβ
tion for a good is given by q-fk)- k++2(kl2. Calculate the elasticity of substitution.
2. For this problem you will analyze the elasticity of substitution and the isoquant graphs for the following produc- tion function F(K.L) 2K2/L/3 (a) Graph the isoquant for F(K,L) that represents an output of 8. Be sure to show your work and label the axes clearly. Also, two points should be clearly labelled. (3 points) 10 9 7 6 5 4 3 2 6 7 89 10 2 3 4 5 (b) What is the marginal rate of technical substitution...
1. Given the production function Q=L?, calculate the average product of labor for L= 2, and also calculate the marginal product of labor between L = 1 and L = 2. A) The average product of labor is 2 and the marginal product of labor is 2. B) The average product of labor is 1 and the marginal product of labor is 3. C) The average product of labor is 3 and the marginal product of labor is 2. D)...
Why is the elasticity of substitution between labor and capital an important concept in Macroeconomics and production