Quiz 13 Returns To Scale Ans

# Quiz 13 Returns To Scale Ans - 2 y n =[0.3 t 1/2 K o 1/2...

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Shomu Banerjee ECON 201 RETURNS TO SCALE ANSWERS Find the returns to scale for the following production functions where y denotes output, and K , L , and E are inputs. Show your work! (a) y = K 1/3 . L 1/3 y o = K o 1/3 . L o 1/3 y n = ( tK o ) 1/3 . ( tL o ) 1/3 y n = ( t ) 1/3 ( K o ) 1/3 . ( t ) 1/3 ( L o ) 1/3 y n = ( t 1/3 . t 1/3 )( K o 1/3 . L o 1/3 ) y n = ( t )( K o 1/3 . L o 1/3 ) y n = t 2/3 . y o DRS (b) y = 4 K . L . E y o = 4 . K o . L o . E o y n = 4 . tK o . tL o . tE o y n = t 3 (4 K o . L o . E o ) y n = t 3 ( y o ) IRS (c) y = [0.3 K 1/2 + 0.7 L 1/2 ] 2 y o = [0.3 K o 1/2 + 0.7 L o 1/2 ] 2 y n = [0.3( tK o ) 1/2 + 0.7( tL o ) 1/2
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Unformatted text preview: ] 2 y n = [0.3 t 1/2 K o 1/2 + 0.7 t 1/2 L o 1/2 ] 2 y n = [ t 1/2 (0.3 K o 1/2 + 0.7 L o 1/2 )] 2 y n = t (0.3 K o 1/2 + 0.7 L o 1/2 ) 2 y n = t . y o CRS (d) y = (2 K +3 L ) 1/2 y n = [2( tK o ) + 3( tL o )] 1/2 y n = [ t . (2 K o + 3 L o )] 1/2 y n = t 1/2 (2 K o + 3 L o )] y n = t 1/2 y o DRS...
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