(1) Consider the production function given by y = f(L,K) = L¹K), where y is the output, L is the labour input, and K is

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1 Consider The Production Function Given By Y F L K L K Where Y Is The Output L Is The Labour Input And K Is 1 (108.2 KiB) Viewed 45 times

(1) Consider the production function given by y = f(L,K) = L¹K), where y is the output, L is the labour input, and K is the capital input. (a) Does this exhibit constant, increasing, or decreasing returns to scale? (b) Suppose that the firm employs 27 units of capital, and in the short-run, it cannot change this amount. Then what is the short-run production function? (c) Determine whether the short-run production function exhibits diminishing marginal product of labour. = (d) In the long-run, both inputs are variable. Find the marginal rate of technical substitution (MRTS). If the firm employs L = 16 and K 8, what does the MRTS tell you?