Prove Euler's theorem that, if f(L, K) is homogeneous of degree ( (see Exercise 5.7), then L((f/(L)
Question:
Prove Euler's theorem that, if f(L, K) is homogeneous of degree ( (see Exercise 5.7), then L((f/(L) + K((f/(K) = (((L, K). Given this result, what can you conclude if a production function has constant returns to scale? Express your results in terms of the marginal products of labor and capital.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 61% (18 reviews)
If fxL xK x fL K then diffe...View the full answer
Answered By
Hassan Ali
I am an electrical engineer with Master in Management (Engineering). I have been teaching for more than 10years and still helping a a lot of students online and in person. In addition to that, I not only have theoretical experience but also have practical experience by working on different managerial positions in different companies. Now I am running my own company successfully which I launched in 2019. I can provide complete guidance in the following fields. System engineering management, research and lab reports, power transmission, utilisation and distribution, generators and motors, organizational behaviour, essay writing, general management, digital system design, control system, business and leadership.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Microeconomics Theory and Applications with Calculus
ISBN: 978-0133019933
3rd edition
Authors: Jeffrey M. Perloff
Question Posted:
Students also viewed these Economics questions
-
Suppose that your firm's production function has constant returns to scale. What is the long-run expansion path?
-
In this exercise, we are working with the concept of an elasticity of substitution. This concept was introduced in part B of the Chapter. Thus, this entire question relates to material from part B,...
-
A function ((X, Y) is homogeneous of degree ( if, when we multiply each argument by a constant , f(X,Y) = (((X, Y). Thus, if a function is homogeneous of degree zero, ((X,Y) = 0( (X, Y) = ((X, Y),...
-
A palindrome is a string that is the same backward as it is forward. For example,tot and otto are rather short palindromes. Write a program that lets a user enter a string and that passes to a bool...
-
A jet engine receives a flow of 150 m/s air at 75 kPa, 5C across an area of 0.6 m2 with an exit flow at 450 m/s, 75 kPa, 600 K. Find the mass flow rate and thrust.
-
ABC, a corporation, generated $770,000 in operating income for the year. It also sold two depreciable operating assets (Section 1231 assets) during the year. For Asset 1, ABC realized a $19,000 gain...
-
What purposes are served in confirming debt with holders?
-
Java Source, Inc. (JSI), is a processor and distributor of a variety of blends of coffee. The company buys coffee beans from around the world and roasts, blends, and packages them for resale. JSI...
-
Use your electronic device or pen and paper to draw the appropriate economic models. Be sure to label all you axis, curves, prices, and quantities . Once you are done, upload your work to the...
-
Whitestone Company produces two subassemblies, JR-14 and RM-13, used in manufacturing trucks. The company is currently using an absorption costing system that applies overhead based on direct-labor...
-
Show that with a constant returns to scale production function, the MRTS between labor and capital depends only on the K/L ratio and not on the scale of production?
-
For the CES production function q = (aL( + [1 - a]K()d/(, does (APL/(L have an unambiguous sign?
-
Papas Pizza is considering replacement of its pizza oven with a new, more energy-efficient model. Information related to the old and new pizza ovens follows: Old ovenoriginal cost ..........$ 60,000...
-
Suppose that two projects each cost $\$ 10,000$. The first project returns $\$ 3,000$ a year for 7 years. The second project returns $\$ 5,000$ a year for two years. Which has the better payback...
-
Do you agree or disagree with Paul Butler's call for "race-conscious jury nullification"? What are the dangers inherent in allowing jurors to nullify the law based on the race of the defendant?
-
Should juries be notified by the judge that they are allowed to nullify the law? Are there situations when jury nullification can be justified? Where it produces injustice rather than justice?
-
How much did the Big Dig go over budget?
-
Why did Judge Lynch conclude that the sentence he was required to impose on "Eddie" was "unjust"? Do you agree or disagree with his conclusion?
-
Coffee Company Limited has a trademark with a carrying amount of $83,750, and expected useful life of 15 years. As part of an impairment test on December 31, 2020, due to a change in customer tastes,...
-
You are thinking of investing in one of two companies. In one annual report, the auditors opinion states that the financial statements were prepared in accordance with generally accepted accounting...
-
A Japanese synthetic rubber manufacturers production function is q = 10L0.5K0.5 (Flath, 2011). Suppose that its wage, w, is $1 per hour and the rental cost of capital, r, is $4. a. Draw an accurate...
-
Look at the Application The Sharing Economy and the Short Run. How does the sharing economy affect variable and fixed costs in the short run?
-
What is the long-run cost function if the production function is q = L + K? M
-
Describe one product development recommendation and one market development recommendation for Tesla. Explain why this idea should be adopted by the Tesla EV company in the New Zealand market.
-
A U.S. investor is considering investing $100 million in Fiat stock in Italy. The stock has an expected return of 5% in euros, including the dividend yield, and the investor is forecasting a 3%...
-
Determine "Tyson Food "Company's firmographics, activities, and objectives. Then relate these differences to differences in the organizational cultures of the organizations. or provide detail of any...
Study smarter with the SolutionInn App