Question

4. Given the following production and cost function
Given by Y=15L0.4 K0.5 (Production function)
C=W1L+W2K+100 (Cost Function)
Where L= labor, K= capital,
A) Compute the following
i. APPL (2 points)
ii. APPK (2 points)
iii. MPPL (2 points)
iv. MPPK (2 points)
v. Marginal rate of technical substitution of labour for capital /MRTSLK(2 points)
vi. Expansion path (2 points)
vii. Elasticity of substitution (2 points)
viii. Return to scale (2 points)
ix. Indicate the relationship between elasticity of substitution and scale. (2 points)