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Problem 1 (Production functions, inputs are perfect complements) Fine epoxy is used to produce LEDs and other electrical components. To get stable, good- qualities (durability,
Problem 1 (Production functions, inputs are perfect complements) Fine epoxy is used to produce LEDs and other electrical components. To get stable, good- qualities (durability, resistance, adhesion) epoxy, the epoxy resins (R) are cured (\"linked\") to hardeners (H) like amines and acids, at the following fixed proportion: to produce 1 unit of final epoxy, we need to cure 2 units of R with 1 unit of H. Let Q be the quantity of final epoxy produced, Q(R, H). Then, the production function of epoxy is given by: QCR, H) = ix min(aR, bH), for some positive numbers a and b. a. What is a and b? b. If we want to produce 10 units of the final product epoxy, what would be the least amount needed of R and H? c. Does the production function of epoxy exhibit increasing, constant, or decreasing returns to scale? (IRS, CR5, or DRS?) d. Draw a map of some isoquants of this production function
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