4. Suppose we have a production function $Y = F(K, L)$ that is homogenous of degree 1. Show that $f(\frac{K}{L}) = \frac{Y}{L}$ where $f(\frac{K}{L}) = F(\frac{K}{L}, 1)$. (10 points)
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Homogeneous of degree 1 means that if we multiply both inputs, K and L, by a constant factor, the output, Y, will also be multiplied by the same constant factor. Show more…
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