Answers to Homework 5

Answers to Homework 5 - Econ 302 Fall 2006 C. Engel Answers...

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Econ 302 Fall 2006 C. Engel Answers to Homework 5 This homework is hard if you are not comfortable with mathematics. It will be fun for those who like to solve problems. See how far you can get! You might want to remember some math tools using exponents. First, if you have yx α = , then 1 a x y = . For example, if 1 2 = , then 1 2 1 x y = . If = , we have β αβ = . For example, if 1 2 = , then 3 3 2 = . (Notice that the previous rule is a special case of this rule. That is 1( 1 ) x −− == .) But don’t confuse that with this fact: x xx + = . For example, 17 3 22 x = . Note also that if we have y x = , then 1 = . So, if 2 = , then 1 2 = . Also, remember your simplest calculus. If = , then 1 dy x dx = . For example, if 1 2 = , then 1 2 dy x dx = . 1. Consider an economy described by the production function . 0.3 0.7 (,) YFK L KL a. Does this production function have constant returns to scale? Explain. Yes, it is constant returns to scale. This is demonstrated by: 0.3 0.7 0.3 0.7 (,)() () ( , ) FcKcL cK cL cK L cFKL = b. What is the per-worker production function, yf k = ?
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This note was uploaded on 07/28/2010 for the course ECON 302 taught by Professor Gold during the Spring '07 term at Wisconsin.

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Answers to Homework 5 - Econ 302 Fall 2006 C. Engel Answers...

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