ECON 310 Lecture 3: Econ 310 ClassNotes, Week 2, Class 3, Page 1

F(K,L)= (A aK^(alpha) +(1−a)L^(alpha))^(beta), where α < 1. What condition is necessary for the CES production function to exhibit constant returns to scale? 3. Show that when a CES production function exhibits constant returns to scale, it also exhibits diminishing marginal product for either input.

for the ces utility function U(q₁,q₂) =q₁^p + q₂^p derive theexpressions for the optimal levels of q₁ andq₂.

budget line= p₁q₁ + p₂q₂₌ y (income)