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QUESTION
Suppose the following production function: Q = 10 (K) 1/3 (L) 2/3 subject to; W *L + r * K = Cost.Suppose that K the amount of capital is K =8.
Suppose the following production function: Q = 10 (K)1/3 (L)2/3 subject to; W *L + r * K = Cost.
a. Suppose that K the amount of capital is K =8. If this company hires 64 workers (L), calculate the value of Q.
b. Determine if this production function exhibits constant, increasing or decreasing returns to scale.
c. The marginal Products are the following: MPK = and MPL = Please derive the marginal rate of technical substitution
