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Economics

The Constant Elasticity of Substitution function

The CES Function is Q(K,L)=A[βK^ρ+(1-β) L^ρ]]^(γ/ρ)

1. Determine the returns to scale of this production function.

2. Find σ, the elasticity of substitution.

3. Express K/L as a function of w/r. How does the relationship between K/L and w/r change when ρ changes?

4. Show that σ=1 for the Cobb-Douglas Production Function.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91424463

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