For the Cobb Douglas production function in Problem 6 7, it can be shown (using calculus) that MPK aKa 1 Lb MPL bKa Lb 1 If the Cobb Douglas exhibits constant returns to scale (a b 1), show that a Both marginal productivities are diminishing b The RTS for this function is given by RTS bK aL c The function exhibits a diminishing RTS

Question: For the Cobb-Douglas production function in Problem 6.7, it can be shown (using calculus) that MPK = aKa-1 Lb MPL = bKa Lb-1 If the

For the Cobb-Douglas production function in Problem 6.7, it can be shown (using calculus) that
MPK = aKa-1 Lb
MPL = bKa Lb-1
If the Cobb-Douglas exhibits constant returns to scale (a þ b ¼ 1), show that
a. Both marginal productivities are diminishing.
b. The RTS for this function is given by
RTS = bK/aL
c. The function exhibits a diminishing RTS.

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