Please assist with E and F Suppose a farmer is using two inputs, labour (L) and capital (K), to produce the same amountof wheat (i.e. 100 tons of wheat). The production function is given by L0.5 + K0.33a) Discuss any three (3) characteristics of the model described above.b) Explain how it would be possible for a farmer to use L and K to produce the sameamount of wheat.c) Derive MPP of L and MPP of K.d) Determine the marginal rate of substitution of L and K.Prove, algebraically, that the Marginal Rate of Substitution (MRS) between L and Kisgiven by MRSLK = -MPPL/MPPK.f) Explain why the total change in wheat output along the isoquant curve is equal to zero.

Answered: e) Prove, algebraically, that the…

ENGR.ECONOMIC ANALYSIS

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Please assist with E and F

Suppose a farmer is using two inputs, labour (L) and capital (K), to produce the same amount
of wheat (i.e. 100 tons of wheat). The production function is given by L0.5 + K0.33
a) Discuss any three (3) characteristics of the model described above.
b) Explain how it would be possible for a farmer to use L and K to produce the same
amount of wheat.
c) Derive MPP of L and MPP of K.
d) Determine the marginal rate of substitution of L and K.
Prove, algebraically, that the Marginal Rate of Substitution (MRS) between L and Kis
given by MRSLK = -MPPL/MPPK.
f) Explain why the total change in wheat output along the isoquant curve is equal to zero.

Expert Solution

Step 1

Given

Production function: $Y = L^{0.5} + K^{0.33}$ .... (1)

We have to show that the marginal rate of substitution $M R S_{L K} = - \frac{M P P_{L}}{M P P_{K}}$

The marginal rate of substitution if the slope of the isoquant curve.

$M R S_{L K} = \frac{d K}{d L}$ ..... (2)

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e) Prove, algebraically, that the Marginal Rate of Substitution (MRS) between L and K is given by MRSLK = -MPPL/MPPK. f) Explain why the total change in wheat output along the isoquant curve is equal to zero.