Question: 1. (10 marks) Consider the following production function y = F (K, L) = TK'ILB where K and L represent capital and labor inputs respectively.

1. (10 marks) Consider the following production function y = F (K, L) = TK'ILB where K and L represent capital and labor inputs respectively. T captures technological progress and is assumed constant here. a and [3 are two positive parameters. (a) (6 marks) Study the homogeneity of the production function. How would the output change if the rm doubles its inputs? (b) (6 marks) Find the marginal product of capital (M Pk) and the marginal product of labor (MPL). (c) (6 marks) Assume that ,8 = 1 a. Show that Euler's theorem holds for this production function

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