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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) 1,2 = ii) Fixed Proportions (1) q = f(K,L) = min(aK,bL) (2) 1,2 = 0 iii) Cobb Douglass (1) q = f(K,L) = AK a L b (2) 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 L-3/4 MP L = K 1/2 L-3/4 AP K = 4K-1/2 L 1/4 MP K = 2K-1/2 L 1/4 MRTS K,L = RTS K,L = (2K-1/2 L 1/2 )/( 2K 1/2 L-1/2 ) = L/K...
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This note was uploaded on 04/10/2008 for the course ECON 3150 taught by Professor Tittle during the Spring '08 term at Georgia Institute of Technology.
- Spring '08