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A = -51/48"l/2 = 0.264 j - /j while if.\'i = 10 and x2 = 16 (x\/x2 = 5/8). we get /, = ^ltr3/416l/2 = 0.178

Euler's Theorem

The following theorem, referred to as Huler's theorem, leads to an interesting result for the special case of a production function which is homogeneous of degree k = 1. First, we present the general case for any value of k.

Theorem 11.19

(Euler's theorem) If j(\), x

e W:. is homogeneous of degree k, then the

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