24. A specific production process can be represented by the production function, f(x1, x2) = (x 1/2 + x 1/3)³. A. How much x₁ could the firm give up if it wanted to use 1 extra unit of x2 and still wanted to produce an identical level of output? B. Labeling everything and being precise, draw the isoquant corresponding to q = 4. C. On the same graph, draw the isoquant corresponding to q = = 9. D. Between the isoquants you just drew, does the production technology display decreasing, increasing, or constant returns to scale? E. Analytically determine whether the production process has global returns to scale that match your local results from part D. Recall that in order to claim global returns to scale, your result must hold for ALL possible values of x1 and x2.
24. A specific production process can be represented by the production function, f(x1, x2) = (x 1/2 + x 1/3)³. A. How much x₁ could the firm give up if it wanted to use 1 extra unit of x2 and still wanted to produce an identical level of output? B. Labeling everything and being precise, draw the isoquant corresponding to q = 4. C. On the same graph, draw the isoquant corresponding to q = = 9. D. Between the isoquants you just drew, does the production technology display decreasing, increasing, or constant returns to scale? E. Analytically determine whether the production process has global returns to scale that match your local results from part D. Recall that in order to claim global returns to scale, your result must hold for ALL possible values of x1 and x2.
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.1P
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