ps441-4 - LONDON SCHOOL OF ECONOMICS Leonardo Felli...

Info icon This preview shows pages 1–2. Sign up to view the full content.

LONDON SCHOOL OF ECONOMICS Leonardo Felli Department of Economics S.478; x7525 Assignment 4 Advanced Microeconomics 1. Is it correct to state that for an homogeneous of degree one production function y = f ( x 1 , x 2 ), an increasing average product for one input, say x 1 , implies that the marginal product of the other input x 2 is negative? 2. Consider a technology that produces a unique output and satisfied the following restrictive form of additivity: f ( x + x ) = f ( x ) + f ( x ) . Further assume that the inputs are infinitely divisible , meaning that if x V ( y ) then λx V ( λ y ), for every λ λ and λ (0 , 1). Show that this technology must be convex . 3. Does the input requirement set V ( y ) = { ( x 1 , x 2 , x 3 ) | x 1 + min { x 2 , x 3 } ≥ 3 y, x i 0 i = 1 , 2 , 3 } corresponds to a regular (closed and non-empty) input requirement set? Does the technology satisfies free disposal? Is the technology convex? 4. Assume that the cost function associated with a given technology is differentiable.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern