Question: Given the production function y= [(l^p+K^p)]^(1/p), what is the technical rate of substitution, the elasticity of substitution, and the returns to scale when p

Given the production function y= [(l^p+K^p)]^(1/p), what is the technical rate of substitution, the elasticity of substitution, and the returns to scale when p = 0.5?

Step by Step Solution

★★★★★

3.50 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

iven Productionfunction Y x when P05 Y R Y LK0 23Kv Technic... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Add each pair of equations. What is the relationship between the graphs of the new equation and the original pair? a. b. 3x-4y = 7 2x+2y = 5 2 5x-7y = 3 -5x +3y = 5

You are given the production function Y = AK1/3N2/3, where A = 4. (a) Convert the production function to a function relating Y/N to K/N. (b) Consider two countries that have access to the same...

You are given the production function Y = AK1/4H1/4N1/2, where A = 4. The population growth rate n is 0.025, the depreciation rate d is 0.075 (both physical and human capital depreciate at the same...

Suppose a firm has a production function given by Y = zK0.3 N0.7. (a) If z = 1 and K = 1, graph the production function. Is the marginal product of labor positive and diminishing? (b) Now, graph the...

1.11. Embodied technological progress. (This follows Solow, 1960, and Sato, 1966.) One view of technological progress is that the productivity of capital goods built att depends on the state of...

17. LO 7 Suppose a irm has a production function given by Y = zK0.3N0.7. (a) If z = 1 and K = 1, graph the production function. Is the marginal product of labor positive and diminishing? (b) Now,...

Consider an economy that produces two goods, a private good X and a public good G. The production function is such that it takes 1 unit of X to produce 2.5 units of G. This economy has only two...

Consider the one-period macro model from class. The representative consumer maximizes her utility by choosing consumption and leisure subject to a budget and time constraint, where MRSl,c = w. The...

1. Consider the production function f(x1, x2) = x2 1x2 2. Does this exhibit constant, increasing, or decreasing returns to scale? 2. Consider the production function f(x1, x2)=4x 1 2 1 x 1 3 2 . Does...

The aggregate investment function (30 Marks) Understanding investment behavior is important to understanding the cyclical behavior of the economy. Here we start with a simple production function,...

Consider the following data for a dependent yariable y and two independent variables. $1 and 1:3; for these data SST = 15,068.91 and SSH. = 1,l.9. 31 32 y 29 12 95 4? 11 109 24 1? 113 so 1? 1?9 41 5...

How do the two components of this theory work together?

Caterpillars of the Monarch butterfly eat plants that are toxic to other animals so that their tissues become toxic. Birds that try to eat Monarchs vomit and then avoid the striking orange-and-black...

You have just been engaged as the external auditor for a medium-sized automotive servicing organization. The organization obtains most of its revenue in three ways: (a) it services motor-vehicle...

You are a staff information systems auditor in a public accounting firm. The firm has just acquired a new client-a small manufacturing organization. The client uses a minicomputer for its data...

The accounting department of a small company is responsible for payment of creditors. It receives a copy of each purchase order issued, a receiving document when the goods arrive, and the vendor's...

PROBLEM 1 Optimization (50 points) 3 A local farmer, Jerry Glover, operates a 1200-acre imrigated farm in rural Water District No. 6.District 4 Authority has just given its water allotments for the...

Respond to the ethical judgments required based on the following scenarios. Scenario 1. Assume you have collected a sample using MUS and that you have evaluated that sample to calculate a total...

Smart Stream Inc. uses the variable cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 6,000 cellular phones are as follows: Variable costs: Fixed...

Discuss what the economic successes of Troubled Asset Relief Program and other government bailouts were and explain why they were also perceived as policy failures.

What is likely to happen to the household saving rate in the United States and other industrialized economies as the proportion of the population that is retired rises? What are some ways that this...

In addition to its Big Mac index, The Economista magazine started to publish a PPP index based on the price of a tall latte at Starbucks coffee shops around the world. This problem is intended to...

The college of business at a state university has a computer literacy requirement for all graduates. Students must show proficiency with a computer spreadsheet software package and with a...

Technological changes in golf equipment have meant people, in particular professional golfers, are able to hit golf balls much farther. Golf Digest reported on a survey conducted involving 300...

For the following hypothesis: with n = 20, = 71.2, s = 6.9, and a = 0.1, state a. The decision rule in terms of the critical value of the test statistic b. The calculated value of the test statistic...