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Unformatted text preview: CHAPTER 7 PRODUCTION FUNCTIONS Because the problems in this chapter do not involve optimization (cost minimization principles are not presented until Chapter 8), they tend to have a rather uninteresting focus on functional form. Computation of marginal and average productivity functions is stressed along with a few applications of Eulers theorem. Instructors may want to assign one or two of these problems for practice with specific functions, but the focus for Part 3 problems should probably be on those in Chapters 8 and 9. Comments on Problems 7.1 This problem illustrates the isoquant map for fixed proportions production functions. Parts (c) and (d) show how variable proportions situations might be viewed as limiting cases of a number of fixed proportions technologies. 7.2 This provides some practice with graphing isoquants and marginal productivity relationships. 7.3 This problem explores a specific Cobb-Douglas case and begins to introduce some ideas about cost minimization and its relationship to marginal productivities. 7.4 This is a theoretical problem that explores the concept of local returns to scale. The final part to the problem illustrates a rather synthetic production that exhibits variable returns to scale. 7.5 This is a thorough examination of all of the properties of the general two-input Cobb- Douglas production function. 7.6 This problem is an examination of the marginal productivity relations for the CES production function. 7.7 This illustrates a generalized Leontief production function. Provides a two-input illustration of the general case, which is treated in the extensions....
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This note was uploaded on 11/06/2009 for the course ECON ECON111 taught by Professor Smith during the Spring '09 term at Punjab Engineering College.
- Spring '09