Suppose life expectancy in years (L) is a function of two inputs, health expenditures (H) and nutrition expenditures (N) in hundreds of dollars per year. The production function is Beginning with c = 1, a health input of $500 per year (H= 5) and a nutrition input of $300 per year (N= 3), show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. The marginal product of health expenditures when H goes from 5 to 6 is, and the marginal product of health when H goes from 7 to 8 is . (Round your answers to three decimal places.) The marginal product of nutrition expenditures when N goes from3 to 4 is. and the marginal product of nutrition when N goes from 5 to 6 is (Round your answers to three decimal places.) Does this production function exhibit increasing, decreasing, or constant returns to scale? This production function exhibits O A. increasing returns to scale. O B. constant returns to scale. OC. first increasing and then decreasing returms to scale. O D. decreasing returns to scale. O E. first decreasing and then increasing returns to scale Suppose that in a country suffering from famine, N is fixed at 1 and that o2. Plot the production function for life

Suppose life expectancy in years (L) is a function of two inputs, health expenditures (H) and nutrition expenditures (N) in hundreds of dollars per year. The production function is Beginning with c = 1, a health input of $500 per year (H= 5) and a nutrition input of $300 per year (N= 3), show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. The marginal product of health expenditures when H goes from 5 to 6 is, and the marginal product of health when H goes from 7 to 8 is . (Round your answers to three decimal places.) The marginal product of nutrition expenditures when N goes from3 to 4 is. and the marginal product of nutrition when N goes from 5 to 6 is (Round your answers to three decimal places.) Does this production function exhibit increasing, decreasing, or constant returns to scale? This production function exhibits O A. increasing returns to scale. O B. constant returns to scale. OC. first increasing and then decreasing returms to scale. O D. decreasing returns to scale. O E. first decreasing and then increasing returns to scale Suppose that in a country suffering from famine, N is fixed at 1 and that o2. Plot the production function for life

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.14P

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