Give an economic interpretation

Question

Problem

Consider the problem of maximizing p₁f₁(L₁,K₁)+ p₂f₂(L₂,K₂), subject to the full employment constraints L₁+L₂ ≤ L and K₁+K₂ ≤ K. Call the result the GDP function G(p,L,K), where p = (p₁,p₂) is the price vector. Then answer:

(a) What is ∂G/∂pi? (Hint: we solved for this in the chapter)

(b) Give an economic interpretation to ∂G/∂L and ∂G/∂K.

(c) Give an economic interpretation to ∂² G/∂p_i∂L = ∂² G/∂L∂p_i, and ∂² G/∂p_i∂K = ∂² G/∂K∂p_i.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.