question archive Problem 4 a) Derive the contingent demand function for capital, i
Problem 4 a) Derive the contingent demand function for capital, i
Subject:EconomicsPrice: Bought3
Problem 4 a) Derive the contingent demand function for capital, i.e. k*(q,r,w) b) Now derive the marginal change of contingent labor demand for an increase in capital price v. Also derive the marginal change of contingent capital demand for an increase in labor price. What do you find when you compare the two? c) Young's theorem says that the second cross derivatives of a function f(x,y) are the same independent of the order of differentiation, i.e. fxy = fux. Can this help you to explain the result in b)?
