== Let f(x1, x2)=xx be a Cobb-Douglas production technology where a, ß > 0 and a +ẞ<1. (i) Show that the technology satisfies monotonicity, diminishing marginal product, diminishing TRS, and diminishing returns to scale. (ii) Which of these properties are invariant to arbitrary increasing transfor- mations of the technology? That is, which properties remain true for oof(x1, x2), where o can be any strictly increasing function? You can assume that is differentiable for convenience.

== Let f(x1, x2)=xx be a Cobb-Douglas production technology where a, ß > 0 and a +ẞ<1. (i) Show that the technology satisfies monotonicity, diminishing marginal product, diminishing TRS, and diminishing returns to scale. (ii) Which of these properties are invariant to arbitrary increasing transfor- mations of the technology? That is, which properties remain true for oof(x1, x2), where o can be any strictly increasing function? You can assume that is differentiable for convenience.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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