1. If the estimated Cobb-Douglas production function is Q=10KL a. What are the output elasticities of capital and labor? If the firm increases only the quantity of capital or only the quantity of labor used by 10%, by how much would output increase?( b. What type of returns to scale does this production function indicate? If the firm increases at the same time both the quantity of labor and the quantity of capital used by 10%, by how much would output increase? (

1. If the estimated Cobb-Douglas production function is Q=10KL a. What are the output elasticities of capital and labor? If the firm increases only the quantity of capital or only the quantity of labor used by 10%, by how much would output increase?( b. What type of returns to scale does this production function indicate? If the firm increases at the same time both the quantity of labor and the quantity of capital used by 10%, by how much would output increase? (

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter9: Production Functions

Section: Chapter Questions

Problem 9.5P

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