52.Mrs Nti has an income (M) of GH 400 to spend on two commodities Maize and Yams.
Maize costs GH¢1.5 per unit and Yams costs GH¢1.2 per unit.
a.Write down Mrs. Nti's budget equation.
b.Write down Mrs. Nti's budget line.
c.What is Mrs. Nti's Marginal Rate of Substitution of Maize to Yams?
d.If Mrs. Nti's spends all her income on either Maize or Yams, how much of each
commodity could she buy?
53.The production of Fresh Milk in LIPREC at Legon/Nungua is characterized by the following
production function: 0.75 K^0.7 L^0.6
a) Compute the factor intensity ratios and comment on each
b)The Fresh Milk production function is characterized by decreasing returns to scale. Do you agree with this statement? Why?
c)Compute the marginal product of capital (MPK) and the Marginal product of labour (MPL)
d)Compute the MRTS L, K
e) What is the magnitude in the efficiency parameter of the Fresh Milk production technology?
What does this efficiency parameter imply?