What is the forms marginal rate of technical substitution

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Reference no: EM133328002

Question:

(a) (i) Suppose that a ?rm's production function is Q = 75K 0'4 L 0'7.What is the value of the output elasticity of labor? What is the value of the output elasticity of capital? Does this ?rm's production function exhibit constant, increasing, or decreasing returns to scale?

ii) What is the ?rm's marginal rate of technical substitution?

(b) Demonstrate With relevant illustrations under what conditions is the government required to intervene in the economy due to market failure? In your View do you think it is necessary? Why or why not?

Reference no: EM133328002

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