6A-1. Distinguish between technical and economic efficiency in the production process.
6A-2. The smooth curve of an isoquant curve implies the ability to substitute small amounts of capital for small amounts of labor. Given that a person is not physically divisible, how can the firm use a fraction of a person’s time? Similarly, how can it increase capital by very small increments?
6A-3. Why do isoquant curves bend back at relatively high and relatively low capital-labor ratios?
6A-4. What is the rule for the optimal input combination? State this rule verbally, and then symbolically. Generalize it to the n input case.
6A-5. Why would you expect the production of any particular product to be typically more capital intensive in more highly developed countries, as compared to less developed countries?