The Constant Elasticity of Substitution function
The CES Function is Q(K,L)=A[βK^ρ+(1-β) L^ρ]]^(γ/ρ)
1. Determine the returns to scale of this production function.
2. Find σ, the elasticity of substitution.
3. Express K/L as a function of w/r. How does the relationship between K/L and w/r change when ρ changes?
4. Show that σ=1 for the Cobb-Douglas Production Function.