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1. Consider the production function: Y = 10KLi (a) Find Y K2 (b) Is the production function characterised by increasing, constan or decreasing returns to
1. Consider the production function: Y = 10KLi (a) Find Y K2 (b) Is the production function characterised by increasing, constan or decreasing returns to scale? Give a reason for your answer. (c) Derive an expression for the the marginal product of labour. Use this expression to explain how an increase in capital affects the marginal product of labour (d) Derive an expression for the the marginal product of capital. Use this expression to explain how an increase in labour affects the marginal product of captial
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