Production functions
Suppose there are two factors of production: capital (K) and labor (N). Let A be a technological parameter (take it as given)
Answer the following:
1. Does any of the following production functions exhibit constant returns to scale? Justify your answer with a one-line proof
(a) Y = AK0.4 N0.6
(b) Y = AKa Nß, with a+ ß>1
(c) Y = min (K; N)
2. Suppose that the production function is given by Y = C + KaN1-a where C is a positive constant. Does an increase in C affect the marginal product of any factor? Will it affect labor productivity?