Q2. The production function is y = LK¹ and (p = $10,w = $20,r = $15). (1) Show whether the production exhibits DRS or CRS or IRS. (ii) Obtain the Marginal Rate of Technical Substitution(MRTS). (iii) Find (Lº, Kº) to minimize the cost in producing given output, y=100.

Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter7: Production And Cost In The Firm
Section7.A: Appendix: A Closer Look At Production And Cost
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Q2.
The production function is y = LaK¹- and (p = $10,w = $20, r = $15).
(1) Show whether the production exhibits DRS or CRS or IR.S.
(ii) Obtain the Marginal Rate of Technical Substitution (MRTS).
(iii) Find (Lº, Kº) to minimize the cost in producing given output, y=100.
Transcribed Image Text:Q2. The production function is y = LaK¹- and (p = $10,w = $20, r = $15). (1) Show whether the production exhibits DRS or CRS or IR.S. (ii) Obtain the Marginal Rate of Technical Substitution (MRTS). (iii) Find (Lº, Kº) to minimize the cost in producing given output, y=100.
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