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Unformatted text preview: turns to scale or constant returns to scale? b. What are the marginal products for factor x and y? c. Are the marginal products for factor x increasing, decreasing or constant as factor x increases? 8. On separate axes, draw typical production isoquants for each of the following production functions. a. f ( x , y ) = min{ 2 x , y }. b. f ( x , y ) = xy . Econ 212 Quiz 4 Answer Section TRUE/FALSE 1. ANS: F 2. ANS: F 3. ANS: F 4. ANS: F 5. ANS: T 6. ANS: T PROBLEM 7. ANS: a. Firm A Increasing returns to scale. Marginal products: MPx = 1.40x .40 y 1.90 MPy = 1.9x 1.40 y 0.90 MPx increase as x increases. Firm B f(kx,ky) = 1.8 (k 0.8 *x 0.8 + k 0.8 y 0.8 ) = k 0.8 f(x,y) decreasing return to scale MPx = 1.8*.8(x.2 ) decreasing as factor x increases MPy = 1.8*.8(y.2 ) 8. ANS: a. The isoquants have a kink at the line 2 x = y. b. These are rectangular hyperbolas....
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This note was uploaded on 01/26/2010 for the course ECONOMICS EC212 taught by Professor Yu during the Spring '08 term at Mt. Holyoke.
 Spring '08
 Yu

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