= za z 1. Suppose that a firm has a Cobb-Douglas production function, that is, f(21,...

 

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= za z 1. Suppose that a firm has a Cobb-Douglas production function, that is, f(21, 22) where a, b > 0. (a) Show that this production technology satisfies the no-free lunch property. (b) Show that this production technology satisfies the free disposal property. (c) Does this production technology have increasing, decreasing or constant returns to scale? (d) Suppose that a = b= 1. Illustrate this production technology's isoquants, and show that it has convex input sets Z(q). (e) Without doing any of the work, describe how you would verify that the production set Q is convex. (f) Find the marginal rate of technical substitution at inputs (2, 22) = (2,3) and (, ) = (4,4). = za z 1. Suppose that a firm has a Cobb-Douglas production function, that is, f(21, 22) where a, b > 0. (a) Show that this production technology satisfies the no-free lunch property. (b) Show that this production technology satisfies the free disposal property. (c) Does this production technology have increasing, decreasing or constant returns to scale? (d) Suppose that a = b= 1. Illustrate this production technology's isoquants, and show that it has convex input sets Z(q). (e) Without doing any of the work, describe how you would verify that the production set Q is convex. (f) Find the marginal rate of technical substitution at inputs (2, 22) = (2,3) and (, ) = (4,4).

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a Showing that the production technology satisfies the nofree lunch property The nofree lunch property states that it is not possible to produce positive output without using any inputs In the given C... View the full answer