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(Solution) - Suppose that a firm has the production function f x1 x2

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Suppose that a firm has the production function f(x1, x2) = ?x1 + x22 .
(a) The marginal product of factor 1 (increases, decreases, stays constant) ________ as the amount of factor 1 increases. The marginal product of factor 2 (increases, decreases, stays constant) ________ as the amount of factor 2 increases.
(b) This production function does not satisfy the definition of increasing returns to scale, constant returns to scale, or decreasing returns to scale. How can this be? ________. Find a combination of inputs such that doubling the amount of both inputs will more than double the amount of output. ________. Find a combination of inputs such that doubling the amount of both inputs will less than double output. ________.

 







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This question was answered on: Jul 11, 2017

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