Suppose the following neoclassical (Cobb-Douglas) aggregate production function, of the Solow character, describes an economy in Africa. Y(t) = F[K(t), L(t)] = K (t) L(t)¹-* Suppose we simplified the production process with no time: Y = AK*L¹-* a. Show that the production process exhibits constant returns to scale. b. Show that the marginal productivities are positive and decreasing. c. Express the production process in per work terms.

Suppose the following neoclassical (Cobb-Douglas) aggregate production function, of the Solow character, describes an economy in Africa. Y(t) = F[K(t), L(t)] = K (t) L(t)¹-* Suppose we simplified the production process with no time: Y = AKL¹- a. Show that the production process exhibits constant returns to scale. b. Show that the marginal productivities are positive and decreasing. c. Express the production process in per work terms.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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