Previous | Next | Chapter 3, Theory of the Firm
Topic: Exercise 3.12
Conf: Chapter 3, Theory of the Firm, Msg: 14978
From: Martin Caley (martin.caley@economics.treasury.gov.im)
Date: 9/3/2004 04:41 AM
Exercise 3.12 Martin Caley MCaley martin.caley@economics.treasury.gov.im
Write y=g(h(x1,x2)) where g(z)=k/(1+1/z) and h is the Cobb-Douglas production function from Exercise 3.9 with A=1. Then y1=g'.h1 and y2=g'.h2 and the result sigma=1 follows from Exercise 3.9.
There is no need for loads of messy differentiation!