400ps2-11 - ECON 400 Winter 2011 PROBLEM SET II(for Friday...

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E C O N 4 0 0 H a r t m a n Winter 2011 PROBLEM SET II (for Friday, January 14) 1. (This is problem 1 at the end of chapter 3.) Show that the following functions are homogeneous and verify that Euler's theorem holds. (a) 2 12 1 2 (, ) fxx xx (b) 2 1 2 2 xx x  (c) 22 1 2 1 2 (, ) ( ) / ( 2 ) x x x x (d) 1 1 2 2 / ( ) x xx x  (e) 1 x 2. (This is problem 3 at the end of chapter 3.) Let 1/ 1 2 (, ) [ ( 1 ) ] A x x   . Show that is homogeneous of degree 1. This is the equation of the constant elasticity of substitution (or CES) production function. 3. (This is problem 4 at the end of chapter 3.) Let [(, ) ] Fhxx where h is homogeneous
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This note was uploaded on 04/04/2011 for the course ECON 400 taught by Professor Ellis,g during the Spring '08 term at University of Washington.

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