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1.Consider a Cobb-Douglas production function: Y = zK a (N d ) 1-a a.Show that this production function exhibits constant returns to scale (That is,
1.Consider a Cobb-Douglas production function:
Y = zKa(Nd)1-a
a.Show that this production function exhibits constant returns to scale (That is, show that when K becomes xK and Nd becomes xNd, Y becomes xY for x > 0).
b.What is MPN? Is it increasing or decreasing in Nd?
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