Question 2: For this problem you will analyze the elasticity of substitution and the isoquant graphs for two different production functions F₁(K, L) = 4K + 2L F₂(K, L) = K²/³ [1/3 (a) Graph the isoquant for F₁(K, L) = 4K+2L that represents an output of 8. Be sure to show your work and label the axes clearly (b) What is the marginal rate of technical substitution (MRTS) for F₁ ? (c) What is the elasticity of substitution for F₁ ? /

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter9: Production Functions
Section: Chapter Questions
Problem 9.1P
Question
Question 2: For this problem you will analyze the elasticity of substitution and the
isoquant graphs for two different production functions
F₁(K, L) = 4K + 2L
F₂(K, L) = K²/³ [1/3
(a) Graph the isoquant for F₁(K, L)
=
4K+2L that represents an output of 8. Be
sure to show your work and label the axes clearly
(b) What is the marginal rate of technical substitution (MRTS) for F₁ ?
(c) What is the elasticity of substitution for F₁ ? /
Transcribed Image Text:Question 2: For this problem you will analyze the elasticity of substitution and the isoquant graphs for two different production functions F₁(K, L) = 4K + 2L F₂(K, L) = K²/³ [1/3 (a) Graph the isoquant for F₁(K, L) = 4K+2L that represents an output of 8. Be sure to show your work and label the axes clearly (b) What is the marginal rate of technical substitution (MRTS) for F₁ ? (c) What is the elasticity of substitution for F₁ ? /
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