ECON 1540 Lecture Notes - Homogeneous Function, Estonian Kroon, Partial Derivative

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26 May 2014
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5 f ( 2, 3) = 2( 2) + ( 2)2(33) Example: frisch and haavelmo estimated the de- mand for milk. Ar2. 08 p1. 5 x = (6: x represents milk consumption, r repre- sents income per family and p represents price. F (s, e) = 2. 26s0. 44e0. 48 (7: s represents stock of lobsters, e repre- sents harvest/catch, let"s evaluate f at (ts, te). Example: the previous example is a special case of a cobb douglas function: F (x, y) = axayb (9: a, a, b are constants and x, y > 0. 10: let"s evaluate f at (2x, 2y) = 2a+bf (x, y) (10: this is also an example of a homoge- neous function, it is homogeneous of degree a + b. 11 (b) partial derivatives with two variables: in the single variable case with y = f (x) we de ned the derivative as f (x + ) f (x) dy dx.

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