Question

Specific Output Functions, Q = f(L,K): Below are some specific output functions. For each production function (1) Explain how the firm uses the inputs capital (K), and labor (L): (2) Provide an illustration of the corresponding isoquants the preference yield - include three isoquants with unique levels of output; (3) Provide a general form of the production function and create two specific production functions; and (4) Calculate the MRTS Lx for each of your proposed production functions (if possible). (1) Perfect Substitutes Production Function (2) Perfect Complements Production Function (3) Cobb-Douglas Production Function

Answer 1

] ] PERFECT SUBSTITUTES LEK O =(+2K MRS = MRS = 42 MRS = 2oCaL doldk K k 3 ISOQUANT FOR o=1tk 2 1 2 3 L K K 6 4 ISOQUANT FOR o=L+2k 2 1 2 3 L PERFECT COMPLEMENT o = min (L,K) o = min (1,2k) y MRS=0 K K K K 3 3 2 1 ㅔ 1 3 L 2 4 6 L

COBB DOUGLAS e O = Kl 12 -1/2 MRS = 72 doldL dolak & K К. & K V K-/2 L/2 L 3/4, Yy K L MRS z Y L-3144 374 K K К L ㄴ 3/4 k-Y4 Lry @=K² 1/2 0 = 434 L4 L k K к ta L