Problem 1: What are two assumptions that a production function must satisfy?
Problem 2: Define what does mean by constant returns to scale (CRS) and check if given production function follows CRS?
Problem 3: The slope of this production function with respect to capital (dy/dx) indicates how much additional output is obtained from an extra unit of capital while holding oter inputs as constant. This amount is called?
Problem 4: In equilibrium, the marginal product of labor equals and the marginal product of capital equal?
Problem 5: The factor demand (Demand for labor and capital) by the firm is determined by?
Problem 6: Plot demand for labor and capital graphs. Assuming fixed supply for labor and capital and show equilibrium wage and rental rate.