For the cobb-douglas production function in problem 67 in, Ask an Expert

Economics

For the Cobb-Douglas production function in Problem 6.7, in can be shown (using calculus) that

MPk = aK ^a-1 L ^b

MPl = bK ^a L^b-1

If the Cobb-Douglas exhibits constant returns to scale (a+b=1), show that

A) Both marginal productivities are diminishing.

B) The RTS for this function is given by

RTS = bK/aL

C) The function exhibits a diminishing RTS.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91422589

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