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Suppose production of output Y requires 3 inputs: capital K, materials M and labor L, combined according to the following aggregate production function: Y =

Suppose production of output Y requires 3 inputs: capital K, materials M and labor L, combined according to the following aggregate production function: Y = A KML where parameters , and are positive constants and A grows at rate g. (a) What restrictions do we need to impose on the parameters of the production function to achieve constant returns to scale in production? Prove your answer. (b) Prove that marginal product of materials satisfies the Inada conditions

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