tutorial_7 - ECOS 2001 Tutorial 7 1 3 1 Suppose that the...

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ECOS2001 Tutorial 7 1 ECOS 2001 Tutorial 7 1. Suppose that the production function is Cobb-Douglas and () 12 32 12 1 2 , fxx x x = . 1. Write an expression for the marginal product of 1 x at the point , x x . 2. The marginal product of 1 x (increases, decreases, remains constant?) for small increase in 1 x , holding 2 x constant. 3. An increase in the amount of 2 x (increase, leaves unchanged, decreasing?) the marginal product of 1 x . 4. What is the technical rate of substitution (TRS) between 2 x and 1 x ? 5. What is the TRS between 2 x and 1 x at the point 3, 2 ? 6. Does this technology have diminishing TRS? 7. This technology demonstrates (increasing, constant, decreasing?) returns to scale. 2. The Ontario Brassworks produces brazen effronteries. Brass is an alloy of copper ( 1 x ) and zinc ( 2 x ), used in fixed proportions. The production function is given by { } ,m i n , 2 = . 1. Draw a few isoquants for this production function. 2. Is this technology convex? 3. Does this production function exhibit increasing, decreasing, or constant returns to scale?
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This note was uploaded on 02/16/2010 for the course ECOS 2001 taught by Professor None during the One '09 term at University of Sydney.

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tutorial_7 - ECOS 2001 Tutorial 7 1 3 1 Suppose that the...

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