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Unformatted text preview: the village is 800 and the local authorities have threatened to close the local post-o²ce if the population falls below 700. How long is the post-o²ce likely to remain open in this village? Q3. Consider the following production functions, where Q is output and L & K denote the respective amounts of labor and capital used in the production process. For each of them, determine whether they are homogenous and if yes, ±nd whether they have increasing, decreasing or constant returns to scale. (a) Q = √ 2 + √ LK (b) Q = √ 2 LK (c) Q = 10 e 2 L K (d) Q = 10 ln( √ LK ) (e) Q = 50 L 2 3 K 1 2...
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This note was uploaded on 02/22/2009 for the course ECONOMICS 4313 taught by Professor Tsui during the Spring '09 term at HKU.
- Spring '09