Production Theory Functions
Not what you're looking for?
Please open the word file to view the mathematical notations.
Question
Consider a firm with production function .
(a) Sketch the isoquant diagram of this firm.
(b) Derive the marginal rate of technical substitution between the two inputs. What is the relationship between the marginal rate of technical substitution and the isoquants drawn in subquestion (a).
(c) Does the function exhibit decreasing, constant, or increasing returns to scale? Is homogeneous of some degree k>0?
(d) Write down the firm's cost minimization problem.
Purchase this Solution
Solution Summary
The expert examines a firm with production functions. The Isoquant diagram of the firm are sketched.
Solution Preview
Please see the attached file.
Question: Consider a firm with production function
(a) Sketch the isoquant diagram of this firm.
For f = 1, = 1, or 3 = 1 - , or z2 =
For f = 2, = 2, or 3 = 2 - , or z2 =
For f = 3, = 3, or 3 = 3 - , or z2 =
For f = 4, = 4, or 3 = 4 - , or z2 =
(b) Derive the marginal rate of technical substitution between the two inputs. What is ...
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.