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A rm has production function f {11,132} = {.r A firm has production function f (mi, x.2) = (xf H- where a and b are
A firm has production function f (mi, x.2) = (xf H- where a and b are strictly positive constants. (a) If a 1/2 and b 2, what are the marginal products of inputs 1 and 2? Are these marginal products diminishing, comstant, or increasing? Does the production function exhibit decreasing, constant, or increasing returns to scale? Along any isoquant, is the technical rate of substitution increasing, constant, or decreasing in input 1? For each of the following parts, find all values of a and b such that (b) the marginal product. of input 1 is diminishing (c) the production function exhibits incremsing returns to scale (d) along any isoquant, the technical rate of substitution is increasing in input 1.
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