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Unformatted text preview: 3) If there are two factors of production, L and K , and 3 / 1 4 / 1 5 K L AP L , what is the formula for ? K MP (Yes, I did mean the marginal product of capital.) 4) Suppose , 1 ) ( ) , ( / 1 + = = L K L K f q a) Show that this function exhibits constant returns to scale b) Calculate L K MP MP and c) Calculate RTS L,K d) Calculate the output elasticity K q , 5) Eulers Theorem implies that for a constant returns-to-scale production function of the form ) , ( L K f q = , L f K f q L K + = . Use this result to show that for a constant returns-to-scale production function, if L L AP MP > then K MP must be negative....
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- Spring '11