Question: suppose iphones are produced using three input factors combined in...
Suppose iPhones are produced using three input factors combined in a Cobb-Douglas production function
where K is capital and Lu and Ls are unskilled and skilled labour.
1. What assumptions on a, b, and c must be true for this production function to exhibit constant returns to scale?
2. Given your answer in part a), explain why this production function exhibits diminishing returns to any single factor (Hint: use derivatives)