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Fill in the Blanks The production function of good x is as follow: a. Does this...

Fill in the Blanks

The production function of good x is as follow:

a. Does this production function have increase, constant or decreasing returns to scale?（ ） (Answer either IRS, DRS or CRS)
b. Calculate the slope of the isoquant when the entrepreneur is producing efficiently with 10 labourers and 20 units of capital. Slope = （ ）(Answer as a fraction.)
c. If we increase the amount of labour we use in our production process from 10 to 25 units, how much change in capital is needed for us to stay on the same isoquant? K= （ ）
d. Is diminishing return a characteristic of this production function? For labour? (yes/no); For Capital (yes/no)?

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Answer #1

FCAK,AL) = 7 (AL) (AK) = 1720.40.3 72 0.7 No.3 03 7 hus = do(ku) Constant retwen to scall exist = MRTS = Mke 7(0.7) K 03 -0.3

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