Question: Q 4 ( 2 5 points ) Firm X has the following production function ( , ) = ( + # ) . ( 1
Q points Firm X has the following production function #
points Find the marginal product of labor and capital and the marginal rate of technical substitution, and state if the returns to capital and labor are increasing, decreasing or constant. Explain what is weird about this MRTS
points Graph the isoquants of the production function and state whether the
production function exhibits constant, increasing or decreasing returns to scale.
points Now suppose that the production function is
$&#where t measures years.
a points How does this affect the marginal products of labor and capital, the returns to scale and the MRTS
b points What is the rate of productivity increase over time? Graph the isoquants for q for t Explain.
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