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Can you help me with question g, h, and i? 1. Cobb-Douglas Production Function. (34 points, 40 minutes) Consider the production function Q = f(K,
Can you help me with question g, h, and i?
1. Cobb-Douglas Production Function. (34 points, 40 minutes) Consider the production function Q = f(K, L) = AK LB, where A > 0, a > 0, and B > 0. (a) Write an equation of the slope of the isoquant, dK/dL. Is isoquant negatively sloped? What is its economic meaning? (b) Is isoquant strictly convex / concave? (c) Prove that Euler's theorem: K x MPK + L x MPL Q holds when a +B= 1. (g) Explain why the firm is not employing production inputs optimally at a point of its expansion path where MRT SL,K 0, a > 0, and B > 0. (a) Write an equation of the slope of the isoquant, dK/dL. Is isoquant negatively sloped? What is its economic meaning? (b) Is isoquant strictly convex / concave? (c) Prove that Euler's theorem: K x MPK + L x MPL Q holds when a +B= 1. (g) Explain why the firm is not employing production inputs optimally at a point of its expansion path where MRT SL,KStep by Step Solution
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