ECON 802 Final: 802 final 2015
Document Summary
In each case, assume there are only two inputs. Use graphs whenever this is helpful in explaining your answers. The leontief production function has well-defined marginal products at all input bundles except for the cost-minimizing input bundles. The cobb-douglas production function is strictly quasi-concave regardless of whether it has increasing, constant, or decreasing returns to scale. The ces production function has a constant elasticity of substitution. (c) (a) we often ask whether a profit maximization problem has a solution, but we rarely. Answer the following questions mostly using words (a little bit of math is ok). ask whether a utility maximization problem has a solution. In the theory of the firm, we distinguish between conditional and unconditional input demand functions. In the theory of the consumer, we distinguish between. Define the local elasticity with respect to scale and explain why it is important in the theory of the firm. Then explain why it is not important in consumer theory.
