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A firm’s production function is given as y=(x1)^(1/2) * (x2-1)^(1/2) where y≥0 for the output, x1≥0...

A firm’s production function is given as y=(x1)^(1/2) * (x2-1)^(1/2) where y≥0 for the output, x1≥0 for the input 1 and x2≥0 for the input 2. The prices of input 1 and input 2 are given as w1>0 and w2>0, respectively. Answer the following questions.

  1. Which returns to scale does the production function exhibit?
  2. Derive the long-run conditional input demand functions and the long-run cost function.
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