Consider the following CES function0-1Y, = A( aK+ (1 – a)L,º||As o → 0, prove the Leontief production function Y; = A min(Kt, Lt).

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Answered: Consider the following CES function 0-1…

Consider the following CES function 0-1 0-1 = A( aK, + (1 – a)L,º As o → 0, prove the Leontief production function Y; = A min(K+, L;).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Consider the following CES function
0-1
Y, = A( aK
+ (1 – a)L,º
||
As o → 0, prove the Leontief production function Y; = A min(Kt, Lt).

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