Derive the degree of homogeneity

Consider a firm which produces a good, y, using two inputs or factors of production, x1and x2. The firm’s production function describes the mathematical relationship betweeninputs and output, and is given byy = A( x1, x2) = xqx2, a, BER+.(a) Derive the degree of homogeneity of the firm’s production function.(b) The setS = {(X1,x2) E RHxix2 = yo}is the set of combinations of (x1,x2) which produce output level yo. S is a level curve of and is referred to by economists as the isoquant associated with output level yo. Theisoquant implicitly defines x2 as a function of x1.i) Use implicit differentiation to derive the slope of the isoquantxix2 = yo-That is, derive "2.(Note that along a given isoquant Ay = 0).ii) Use implicit differentiation to derive *2 for the isoquantxix2 = yo.iii) What conclusions do you draw regarding the slope and curvature of the isoquant?Briefly explain.(c)i) Derive the Hessian matrix associated with the firm’s production functionA(x1 , X2 ) = xqx2.ii) State a sufficient condition(s) for (1) to be a strictly concave function.iii) Derive a restriction on the parameters a and B which ensures that (1) is a strictlyconcave function.

“Struggling with a similar assignment?” We can help!!

How it works – it’s easy


Place your Order

Submit your requirements through our small easy order form. Be sure to include and attach any relevant materials.

Make a payment

The total price of your order is based on number of pages, academic level and deadline.


Writing process

We assign the assignment to the most qualified tutor. When the tutor completes the assignment, it is transferred to one of our professional editors to make sure that the assignment meets all of your requirements.

Once complete, we’ll send your assignment via the email provided on the order form.



Achieve academic succes with the best online tutors.