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Unformatted text preview: Micro 3101 Homework Assignment 3 Due on Monday 04/06/2009 Production functions. 1. For the production function f ( L,K ) = AL . 7 K . 3 , do the following: (a) Find the Average Product functions for labor and capital ( AP L , AP K ) . (b) Find the Marginal Product functions for labor and capital ( MP L , MP K ) . (c) Find the Technical Rate of Substitution ( TRS ). (d) Does this production function exhibit decreasing, increasing or con stant returns to scale? (e) Suppose A = 1 . Find the isoquant for output of 100 and graph it. 2. Repeat question 1 for the production function f ( L,K ) = aL + bK. For part e, assume a = 1 , b = 2 . Cost minimization 3. Suppose that a firm has the following technology to produce the good y : y = f ( L,K ) = min { L L , K K } The prices of inputs are w = 1 and r = 5 . (a) What is the meaning of the parameters L and K ? (b) Does this production function exhibit increasing, decreasing or con stant returns to scale? Prove your answer....
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This note was uploaded on 05/09/2010 for the course ECON 3102 taught by Professor Econ during the Spring '10 term at University of Minnesota Crookston.
 Spring '10
 ECON

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