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Unformatted text preview: 3 4 K 1 4 , and w = 2 , r = 8 . (a) Does the production function have diminishing MRTS? Does it have diminishing mar-ginal returns in both inputs ( MP L is decreasing in L , and MP K is decreasing in K )? (b) Given a &xed level of production & q , what relationship is there between L and K ? (c) To produce & q units of output, how many units of L and K are used? (d) Can you derive the total cost, C ( q ) of producing q units of output? (e) What is the marginal cost, MC ( q ) ? 5. Do the same as question 4 but suppose that f ( L;K ) = LK 1 2 . 1...
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This note was uploaded on 07/22/2008 for the course ECON 100B taught by Professor Rauch during the Spring '07 term at UCSD.
- Spring '07