Review the following article: Hogan and Manne (1979) Energy-Economy Interactions: The Fable of the Elephant and the Rabbit, Advances in the Economics of Energy and Resources, Vol. 1, pp. 2-26  On the basis of your review please answer the following questions: a) What central issue is analysed in this article?  (no more than two lines). b) What perspective do the authors offer on the central issue identified by you? (no more than two lines). c) What is the most insightful comment you can make about the significance of the issue identified by you, and the authors’ perspective on this issue? ((no more than  three lines).  
Question 2 (25marks)  
A hypothetical production process utilises three inputs, namely, energy, capital, and labour. The price of one unit of energy is $1, for capital, $2, and for labour $3. This production process currently uses 100 units of energy, 150 units of capital, and 200 units of labour to produce X units of output. Due to changes in energy policy settings, the unit price of energy increases to $2. Other things remaining the same, this production process now utilises 70 units of energy, 170 units of capital, and 200 units of labour to produce X units of output.   
a) What is the elasticity of substitution between energy and labour? 
b) What is the elasticity of substitution between capital and labour? 
c) What are the possible reasons for the differences between the two elasticities? (no more than two dot points, with each dot point no more than two lines)  
Question 3 (15 marks) 
A hypothetical production process utilises two inputs, namely, energy and capital. This production process currently uses 100 units of energy and 150 units of capital to produce 1000 units of output.  
CASE 1 Assume that the energy input is now increased to 120 units, with capital input remaining at the original levels. The output increases to 1200 units. 
a) What is the production elasticity of electricity? 
b) What is the production elasticity of capital?  
CASE 2 Assume that the capital input is now increased to 160 units, with energy input remaining at the original levels. The output increases to 1200 units  
c) What is the production elasticity of electricity? 
d) What is the production elasticity of capital?   
Question 4 (20 marks) 
 Develop a philosophical critique of the major assumptions that underpin neoclassical production functions. (no more than three lines for each assumption).