Question
) Suppose a production function F(L, E) = Q = L1/2E3/2 where L represents the variable input labour, E is the variable input energy, and
) Suppose a production function F(L, E) = Q = L1/2E3/2 where L represents the variable input labour, E is the variable input energy, and Q stands for total output. a) Determine whether the marginal product of labour increases, decreases, or remains constant when L increases holding E constant. b) Determine whether the marginal product of energy increases, decreases, or remains constant when E increases holding L constant. c) Determine whether the marginal product of labour increases, decreases, or remains constant when E increase. d) Determine whether the marginal product of energy increases, decreases, or remains constant when L increases. e) Determine whether the production technology exhibits increasing, constant, or decreasing returns to scale.
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