# Questions tagged [elasticity-of-substitution]

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### When do workers versus capital owners share of income increase?

The share of total income obtained by workers rather than capital owners is for obvious reasons of interest. Assuming that the economy can be desribed by an aggregate production function $$Y = F(K,L)$$...
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### Elasticity of substitution

So, this is an economics question but the problem I have is a pure math problem I guess. So I have the following equation:f(x,y) this function have the elasticity of substitution(EOS): 1/(1-beta). a,...
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### How to simulate changes in quantity demanded when several prices change?

I am not sure if this is a straightforward question or not. Basically, I have a set of products along with their prices and quantities demanded. I also have own and cross price elasticities for each ...
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### Demand Elasticity, Factor Substitution: Independent?

Given $Y=f(K,L;\sigma)$, the effect on labor from a change in the price of capital can be gauged through a substitution effect and a scale effect: \begin{align*} \frac{\partial L}{\partial r} & ...
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### Elasticity of substitution meaning

If I computed an elasticity of substitution of f.e. 0.9 between capital and labour, does this implicate that the factors are rather well substitutable or not? Since for 0 they are perfect complements ...
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### Raising the elasticity of substitution in an economy

Papers such as de la Grandville (1989) and Klump/de la Grandville (2000) have shown that a higher elasticity of substitution leads to higher economic growth. My question is, if there is a way to ...
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Suppose I have a multiperiod consumption-saving problem with two or multiple goods able to be consumed. If the utility within a period is Constant Elasticity of Substitution, ie. $C = (c_1^\frac{\... • 41 0 votes 2 answers 167 views ### Is elasticity of substitution defined for non-homogeneous production functions? The elasticity of substitution between two inputs$x_1$and$x_2$is typically given as $$\frac{d \ln \left( \frac{x_2}{x_1} \right)}{d \ln(\mathrm{MRTS}_{21})}.$$ As these notes show, if the ... • 770 0 votes 1 answer 492 views ### How to find the elasticity of substitution for the general CES-function? I have to find the EOS for the general CES-function defined as $$y = (a_1x_1^p+a_2x_2^p)^{1/p}$$ I first find$MP_1$and$MP_2$to find$MRTS$. We have that$MP_1 = \frac{\partial y} {\partial ...
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Isoquants - the level sets of a production function $f$ - are very useful in microeconomics. For example, if we hold all but two inputs fixed, then the isoquant is a plane curve that quantifies the ...