Explain case of a perfect-complements production function

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Reference no: EM13191712

1. Assume two inputs, K and L. Illustrate the following cases with two graphs:

(1) the substitution effect on labor hired due to a wage increase is zero.

(2) the scale effect on labor hired due to a wage increase is zero.

2. Assume two inputs, K and L. Illustrate the following cases with two graphs:

(1) Draw the VMPL and VAPL curves for the case of a perfect-complements production function,

Q = min(K,L).

Reference no: EM13191712

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