Question: Suppose that the production function is f(x 1 , x 2 ) = b(x 1 a + x 2 a ), where a and b

Suppose that the production function is f(x1, x2) = b(x1a + x2a), where a and b are positive constants.

(a) For what values of a and b is there a diminishing technical rate of substitution?

(b) For what values of a and b does the production function exhibit decreasing returns to scale?

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