From the following production functions 1. Q= a1H + a2L + a3H2 + a4 L2 + a5HL, where ai> 0 2. Q = aH@ Ly, where a, @, y > 0 a. Derive the equation of the relevant isoquant. b. Find out whether the production function is well behaved. c. Examine whether the isoquant is well behaved and therefore represents the behaviour of a rational production. d. Derive equation which describes MRTS of 9ne factor. e. For each equation examine whether the production is homogeneous and if so, what is the degree of homogeneity. Is the equation characterized by IRTS, DRTS or CRTS.
From the following production functions 1. Q= a1H + a2L + a3H2 + a4 L2 + a5HL, where ai> 0 2. Q = aH@ Ly, where a, @, y > 0 a. Derive the equation of the relevant isoquant. b. Find out whether the production function is well behaved. c. Examine whether the isoquant is well behaved and therefore represents the behaviour of a rational production. d. Derive equation which describes MRTS of 9ne factor. e. For each equation examine whether the production is homogeneous and if so, what is the degree of homogeneity. Is the equation characterized by IRTS, DRTS or CRTS.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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From the following production functions
1. Q= a1H + a2L + a3H2 + a4 L2 + a5HL, where ai> 0
2. Q = aH@ Ly, where a, @, y > 0
a. Derive the equation of the relevant isoquant.
b. Find out whether the production function is well behaved.
c. Examine whether the isoquant is well behaved and therefore represents the behaviour of a rational production.
d. Derive equation which describes MRTS of 9ne factor.
e. For each equation examine whether the production is homogeneous and if so, what is the degree of homogeneity. Is the equation characterized by IRTS, DRTS or CRTS.
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Step 1: Define Production function:
VIEWStep 2: Derive the Equation of the Relevant Isoquant
VIEWStep 3: Determine if the Production Function is Well Behaved
VIEWStep 4: Examine if the Isoquant is Well Behaved
VIEWStep 5: Derive the MRTS equation
VIEWStep 6: Analyze Homogeneity and Returns to Scale
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