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Practice Problems For Production Functions

1) The document provides practice problems on basic attributes of production functions. It asks to prove the Euler's theorem for linear homogeneous Cobb-Douglas and CES production functions and explain their key properties. 2) It asks whether the given production functions are homogeneous and comment on their returns to scale. It also asks to demonstrate the returns to scale for a general Cobb-Douglas production function. 3) For the Cobb-Douglas and CES production functions, the labor share to capital share ratio depends on the capital share.

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Fariya Hossain
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90 views1 page

Practice Problems For Production Functions

1) The document provides practice problems on basic attributes of production functions. It asks to prove the Euler's theorem for linear homogeneous Cobb-Douglas and CES production functions and explain their key properties. 2) It asks whether the given production functions are homogeneous and comment on their returns to scale. It also asks to demonstrate the returns to scale for a general Cobb-Douglas production function. 3) For the Cobb-Douglas and CES production functions, the labor share to capital share ratio depends on the capital share.

Uploaded by

Fariya Hossain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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ECO244: Applied Mathematics 2 Summer 2010 PRACTICE PROBLEMS T pic: Basic attributes of production functions C urse I!struct r: "##!

!$ %1& Supp se ' u c !sider the ( ll )i!* Li!earl' h m *e! us C ++,- u*las pr ducti ! (u!cti !:
Q = AK L1 & Pr .e the Euler/s the rem&

%2& E0plai! the +asic ( ur pr perties ( li!earl' h m *e! us C ++,- u*las pr ducti ! (u!cti !& %1& Supp se ' u c !sider the ( ll )i!* CES pr ducti ! (u!cti !:
Q = A[K + (1 ) L ]
1

& Pr .e the Euler/s the rem&

%2& E0plai! the +asic (eatures ( CES pr ducti ! (u!cti !& %3& C mme!t )hether the ( ll )i!* pr ducti ! (u!cti !s are h m *e! us a!d c mme!t ! their retur!s t scale& a& Q = x 0.3 y 0.4 +& Q = x 3 + 2 xy + y 3 c& Q = 7 KL2

%4& C !sider the ( ll )i!* *e!eral C ++,- u*las pr ducti ! (u!cti !:


Q = AK L & -em !strate that this pr ducti ! (u!cti ! e0hi+its a& C !sta!t retur!s t scale )he! + = 1 +& -ecreasi!* retur!s t scale )he! + 51 c& I!creasi!* retur!s t scale )he! + 61

%7& 8 r the C ++,- u*las pr ducti ! (u!cti !9 is the rati

( la+ ur/s share t capital/s

K share depe!de!t ! the rati : - es the same a!s)er appl' t the CES (u!cti !: L

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