Q = F(K, L) = K2 + 2L0.5
(1)
Scale elasticity (E) = (Q/
K)
x (K/Q) + (
Q/
L)
x (L/Q)
= 2K x (K/Q) + [(2 x 0.5) / L0.5] x (L/Q)
= (2K2/Q) + (L0.5/Q)
= (1/Q) x (2K2 + L0.5)
= (2K2 + L0.5) / (K2 + 2L0.5)
(2)
When E = 1,
(2K2 + L0.5) = (K2 + 2L0.5)
K2 = L0.5
Squaring,
K4 = L (Required condition)
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