Question 3. Consider an economy in which the production function of the representative firm is given by the following fo

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Question 3 Consider An Economy In Which The Production Function Of The Representative Firm Is Given By The Following Fo 1 (35.9 KiB) Viewed 28 times

Question 3. Consider an economy in which the production function of the representative firm is given by the following form Y = z 1/3N2/3, where z = 0.5. a. Does the production function have the constant return to scale property? (Show it mathematically) b. Assuming that firm operates with a capital K = 4 in the short-run. Does the production function display the law of decreasing marginal product? (Show it mathematically) c. Find the labor demand function and the optimal demand when w = 1.5.