ARME608 MID TERM EXAM 1995 - ARME 608 First Exam Fall 1995...

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ARME 608 First Exam Fall 1995 1. Plot the average and marginal cost functions that would be generated under the technology represented by the production function ya xb x c x =+ - 23 where y is output, x is input, and a > b > |c|. Relate critical points (i.e. minimum, maximum, inflection) on these cost curves to critical points on the production function. 2. Suppose the production function is given by yx x = 1 5 2 3 .. . Find the marginal rate of technical substitution of x 1 for x 2 and solve for an isocline. Does an isoquant lie closer to the x 1 or the x 2 axis (assuming same scale)? 3. Consider a farm that produces both corn and soybeans. Suppose that the production function for
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