Question: 9.8 Show that Eulers theorem implies that, for a constant returns-to-scale production function [q = f (k, l )], q = fk k +

9.8 Show that Euler’s theorem implies that, for a constant returns-to-scale production function [q = f (k, l )], q = fk · k + fl · l .

Use this result to show that, for such a production function, if MPl > APl then MPk must be negative. What does this imply about where production must take place? Can a firm ever produce at a point where APl is increasing?

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