From the profit maximizing conditions for the Cobb-Douglas ...

[faduma]

From the profit maximizing conditions for the Cobb-Douglas production function, we find that the optimal input demands for labor and capital may be related as L = brK/(aw). Under what conditions are the expenditures on capital and labor equal?
 
  A) Constant returns to scale
  B) Increasing returns to scale
  C) Decreasing returns to scale
  D) a = b

Question 2

Refer to Scenario 14.4. Suppose that a tax is imposed on each unit of the product that John produces. Which curve will shift?
 
  A) Marginal product of labor
  B) Marginal revenue product of labor
  C) The supply of labor
  D) All of the above will shift due to the tax on output.

[maaaaaaaaaa]

Answer to Question 1

D

Answer to Question 2

B

[faduma]

TYSM

[kilada]

Gracias!