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Suppose life expectancy in years (L) is a function of two inputs: health expenditures (H) and nutrition expenditures (N) both measured in hundreds of dollars
Suppose life expectancy in years (L) is a function of two inputs: health expenditures (H) and nutrition expenditures (N) both measured in hundreds of dollars per year. The production function or longevity is: d) L(H,N) = 20 x Ho-BNO-Z Beginning at H = 4 and N = 49, show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. Does the production function [(11, N) exhibit increasing, decreasing or constant returns to scale? Suppose that a country is suffering a famine and nutritional expenditures are xed at N = 2. Graph L(H, N) with L on the vertical axis and H on the horizontal axis. [You can use values of H between 1 and 5.] Suppose the country in part (cl received foreign food aid resulting in an increase in nutritional expenditures to N = 4-. Add the new graph of L(H, N) to the graph you made in part (c). Suppose the country is operating at N = 4 and H = 2 (this is a point on the graph you made in part (dl). If you ran and N60 with the ability to increase nutritional expenditures to that country by 1 or health expenditures in that country by 1, which would you choose in order to maximize the effect on life expectancy of that additional expenditure
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