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Consider the following production function y = F(K, L) = TKαL β where K and L represent capital and labor inputs respectively. Denote by s the capital-labor ratio (s = K L ). T captures technological progress and is assumed constant here. α and β are two parameters. (a) Under what condition(s) does the function exhibit CRS? DRS? IRS? (b) Find the marginal product of capital (MPk) and the marginal product of labor (MPL). (c) Assume that β = 1-α. Rewrite the production function in terms of the capital-labor ratio (s). (d) Assume that β = 1-α. Show that Euler's theorem holds for this production function
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While everyone dreams of high interest rates for investments, usually high interest rates come with other disadvantages. Using the interest or other sources, research and write an essay on the advantages and disadvantages of higher interest rates ..
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