Suppose the production function is Cobb-Douglas and f(x1,x2)) = x11/2x3/221. Write an expression for the marginal product of x1.2. Does marginal product of x1 increase for small increases in x1, holding x2 fixed? Explain3. Does an increase in the amount of x2 lead to decrease the marginal product of x1? Explain4. What is the the technical rate of substitution between x2 and x1?5. What is the type of returns to scale of this production function? (Increasing, decreasing,constant)

As per Bartelby’s guidelines, the first three subparts should be answered. Marginal product is the…

Answered: Suppose the production function is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose the production function is Cobb-Douglas and f(x₁,x₂)₎ = x₁^1/2x^3/2₂
1. Write an expression for the marginal product of x₁_.
2. Does marginal product of x₁ increase for small increases in x₁_, holding x₂ fixed? Explain
3. Does an increase in the amount of x₂ lead to decrease the marginal product of x₁_? Explain
4. What is the the technical rate of substitution between x₂ and x₁_?
5. What is the type of returns to scale of this production function? (Increasing, decreasing,
constant)

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