Question: 9.7 Consider a generalization of the production function in Example 9.3: where q Bo+Bkl+ Bk + Bzl, 0B, 1, i=0,...,3. a. If this function is
9.7 Consider a generalization of the production function in Example 9.3: where q Bo+Bkl+ Bk + Bzl, 0B, 1, i=0,...,3.
a. If this function is to exhibit constant returns to scale, what restrictions should be placed on the parameters Bo,...,B3?
b. Show that, in the constant returns-to-scale case, this function exhibits diminishing marginal productivities and that the marginal productivity functions are homogeneous of degree 0.
c. Calculate or in this case. Although or is not in general constant, for what values of the 's does = 0, 1, or co?
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