Suppose that the production function is f (x, y) = (x^a + y^a)^b, where a and b are positive constants. For what values of a and b is there a diminishing technical rate of substitution?

Suppose that the production function is f (x, y) = (x^a + y^a)^b, where a and b are positive constants. For what values of a and b is there a diminishing technical rate of substitution?

Suppose that the production function is f (x, y) = (x^a + y^a)^b, where a and b are positive constants. For what values of a and b is there a diminishing technical rate of substitution?





Answer: For any value of b if a < 1.