For each of the following production functions, Determine whether returns to scale are decreasing, constant or increasing (show your computations).
a. Q = 3K + 2L + KL
b. Q = 20K.7L.5
The multiplicative production function in part b is known as production function.
a. What is the marginal rate of technical substitution?
b. What relationship does it have with the isoquant?
c. What important relationship exists between the isocost and isoquant in production analysis?
d. What importance does the expansion path has for the production manager?