Suppose the production function is Cobb-Douglas, y = x 1/2 1 x 3/2 2.
(a) Write an expression for the marginal product of x1 at the point (x1, x2). Is it an increasing, decreasing or constant in x1?
(b) Write an expression for the marginal product of x2 at the point (x1, x2). Is it an increasing, decreasing or constant in x2?
(c) What is the technical rate of substitution?
(d) Does this technology demonstrate increasing, decreasing or constant returns to scale?