Problem_Set_03

Problem_Set_03 - Economics 1100: Intermediate...

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Economics 1100: Intermediate Microeconomics Spring 2011 Problem Set 3 1. By studying, Wendy can produce a higher grade, G, on an upcoming economics exam. Her production function for G depends on the number of hours she studies calculus problems, C, and the number of hours she studies economics problems, E. Specifically, G W = 2.5C 0.36 E 0.64 . Her roommate Denise’s grade production function is G D = 2.5C 0.25 E 0.75 . a. What are Wendy’s and Denise’s marginal productivity from studying calculus problems? b. What are their marginal rate of technical substitution between studying the two types of problems? c. Is it possible for two production functions to have different marginal product functions but the same marginal rate of technical substitution functions? Explain. 2. Under what conditions do the following production functions exhibit decreasing, constant, or increasing returns to scale? a.
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This note was uploaded on 03/10/2012 for the course ECON 1100 taught by Professor Unver during the Spring '06 term at Pittsburgh.

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