For this exercise replace ëAíwith the last digit of your ASU ID# and ëBíwith the second-to-last digit of your ASU ID#. Consider the following production function: y = [(A + 1)x1 + (B + 1)x2 ] =; where > 0; 1 > > 0 a. Determine the relationship between and returns to scale. b. DeÖne the cost-minimization problem, obtain the long-run input demand functions and the total cost function when w1 = (A + 1) and w2 = (B + 1): c. Determine the relationship between and both the average and marginal cost function. Explain brieáy why this is consistent with your answer to (a).

Q&A Education