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Unformatted text preview: ii) Truly circular iii) Map Knigthian Stages iv) Show efficient rages c) MRTS i) Fixed Output ii) Change in the amount of on input necessary to adjust for the change in another output iii) Negative to adjust for slope iv) RTS 1,2 = MP 1 /MP 2 = dX 2 /dX 1 q = q v) Prove from dq = 0 vi) Diminishing (1) Not purely a product of diminishing MP (a) MP is a partial assuming X 2 = X 2 (2) Mathematically true (a) P. 296 d) Common Shapes i) Linear (1) q = f(K,L) = aK + bL (2) σ 1,2 = ≡ ii) Fixed Proportions (1) q = f(K,L) = min(aK,bL) (2) σ 1,2 = 0 iii) Cobb Douglass (1) q = f(K,L) = AK a L b (2) σ 1,2 = 1, when a = b = 1 (always true?) (a) use Kas proof Answers TP = q = 4K 1/2 L 1/4 AP L = 4K 1/2 L3/4 MP L = K 1/2 L3/4 AP K = 4K1/2 L 1/4 MP K = 2K1/2 L 1/4 MRTS K,L = RTS K,L = (2K1/2 L 1/2 )/( 2K 1/2 L1/2 ) = L/K...
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 Spring '08
 Tittle
 Economics, Derivative, average total product, Rate of Technical Substitution

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