Answer to Question #147129 in Engineering for Aanchal

Question

What will be the elasticity of substitution of production function q=√L+K ?

Answer 1

$derivative$ of q with respect to L=0.5 L^-0.5

$derivative$ of q with respect to K=1

Technical rate of substitution=0.5/(L)^0.5

Elasticity substitution=reciprocal of [$derivative$ of TRS=-0.25/(L)^1.5]

Elasticity substitution =0.25 L ^3/2