Suppose That the Production Function Is F(x₁, X₂)=(x^a₁ +X^a₂)b, Where

question 14

Multiple Choice

Suppose that the production function is f(x₁, x₂) =(x^a₁ +x^a₂) b, where a and b are positive constants.For what values of a and b is there a diminishing technical rate of substitution?

• A)For any value of a if b < 1
• B)For any values of a and b if ab < 1
• C)For any values of a and b if a > b
• D)For any value of b if a < 1
• E)None of the above.

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