Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

تمرين 6

The production function
(Where A, a, b ? 0) is called a Cobb-Douglas production function. This function is widely used in economic research. Using the function, show the following:
a. The production function in Equation 6.7 is a special case of the Cobb-Douglas.
b. If a + b = 1, a doubling of K and L will double q.
c. If a + b 1, a doubling of K and L will less than double q.
d. If a + b 1, a doubling of K and L will more than double q.
e. Using the results from part b through part d, what can you say about the returns to scale exhibited by the Cobb-Douglas function?