Question: 6.24. Consider a CES production function given by Q ! (K0.5 L0.5) 2 . a) What is the elasticity of substitution for this production

6.24. Consider a CES production function given by Q !

(K0.5 " L0.5)

2

.

a) What is the elasticity of substitution for this production function?

b) Does this production function exhibit increasing, decreasing, or constant returns to scale?

c) Suppose that the production function took the form Q ! (100 " K0.5 " L0.5)

2

. Does this production function exhibit increasing, decreasing, or constant returns to scale?

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