Homework 3

Homework 3 - Econ3101 - Section 003 Intermediate...

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Unformatted text preview: Econ3101 - Section 003 Intermediate Microeconomics Xavier Vinyals-Mirabent * Department of Economics University of Minnesota. Due: Tuesday, March 22nd, 2011. Homework 3. The homework will be due at the beginning of the class. Late homework (within the day) will receive partial credit. Very late homework will receive no credit. The maximum score is 100 points. Make sure to do all parts to all problems and do them clearly for full credit. * Borrowed from Erick Sager with permission. 1 1. A firms production function is: F ( L,K ) = min (4 K, 2 L ) In the short run, this rm must use 40 units of capital. (a) In the upper panel sketch the rms isoquant map. Sketch enough isoquants to give a clear idea of the map. (b) In the lower panel, draw the rms total product curve. 2 2. Recall the denition of Returns to Scale (e.g. for all > 1) from class. In the fol- lowing exercises I want you to think about returns to scale for Cobb-Douglas and CES (Constant Elasticity of Substitution) production functions. For the following, justify whether the production function is Constant, Increasing or Decreasing Returns to Scale....
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Homework 3 - Econ3101 - Section 003 Intermediate...

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