Homework Answers
A)
Each point on the expansion path is a point of tangency between an isoquant and an iso-cost line. Therefore, at each point on the expansion path, we have the numerical slope of the isoquant = numerical slope of the isocost line.
Therefore,
B)
Yes, this function is homothetic. The basic feature of a homothetic function is that the expansion path of these functions are linear and we can see in in the pic ( attached) the expansion path is linear in z1 and z2.
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