ECON400HartmanWinter 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) 21212(, )fxxxx(b) 2122xx x(c) 221212(, ) ()/(2 )x xxx(d) 1122/()x xx x(e) 1x2. (This is problem 3 at the end of chapter 3.) Let 1/12(, ) [(1 ) ]A xx. 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 [(, )]Fhxxwhere his 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.