Prove Eulers theorem that, if f(L, K) is homogeneous of degree (see Exercise 5.7), then L(0f/0L)
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Prove Euler’s theorem that, if f(L, K) is homogeneous of degree γ (see Exercise 5.7), then L(0f/0L) + K(0f/0K) = γf(L, K). Given this result, what can you conclude if a production function has constant returns to scale? Express your results in terms of the marginal products of labor and capital. M 6. Productivity and Technical Change
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Microeconomics Theory And Applications With Calculus
ISBN: 9780133019933
3rd Edition
Authors: Jeffrey M. Perloff
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