Question: 2. Consider the CES production function (a and p are constants): f(L,K) = [aL + (1 a)K] (a) What is the returns to scale

$2. Consider the CES production function ( ( a ) and ( ho ) are constants): [ f(L, K)=left[a L^{frac{1}{ho}}+(1-a)$

2. Consider the CES production function (a and p are constants): f(L,K) = [aL + (1 a)K] (a) What is the returns to scale for this production function? (b) Define the elasticity of substitution as follows: OLK d In (2) din (f) Calculate LK for the above production function and show that it is a constant. Show that for special values of the parameter p, the CES production reduces to the Cobb Douglas, linear and Leontief forms. (d) Derive the cost function and supply function for a firm that has the CES technology.

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