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   Given the production function Q = K.5L.5

a.   Write expressions

for marginal products of K and L

b.   Does production exhibit increasing, decreasing or constant returns to scale? Show proof

c.   If K is held constant does marginal product of L increase, decrease or remain constant as L is increased. Show proof of your answer

d.   Derive an expression for marginal rate of technical substitution of L for K

e.   If Price of K = 1 and price of L =2, what quantities of K and L will be used to produce 500 units of output at least cost?

Top Answer

a. MPK = 0.5 K -0.5 L 0.5 and MPL = 0.5 K 0.5 L -0.5 b.... View the full answer

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