Chapter 18 Technology

# Chapter 18 Technology - Chapter 18 Technology 18.1)Inputs...

This preview shows pages 1–3. Sign up to view the full content.

Chapter 18 Technology 18.1) Inputs and Outputs a) Factors of production : Inputs to production b) Capital goods : Inputs to production that are themselves produced goods (machines) c) Financial Capital : Money used to start up or maintain a business d) Physical Capital : Capital goods. 18.2) Describing Technological Constraints a) Technological constraints : Only certain combinations of inputs can produce a given amount of output. b) Production set : Set of all combinations of inputs and outputs that comprise a technologically feasible way to produce. c) Production function : Boundary of the production set. d) Isoquant : Set of all possible combinations of inputs that are just sufficient to produce a given amount of output. Level curves! 18.3) Examples of Technology a) Fixed proportions 1) f(x 1 ,x 2 )=min{x 1 ,x 2 } 2) Graph of isoquants b) Perfect Substitutes 1) f(x 1 ,x 2 )= x 1 +x 2 2) Graph of isoquants

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
c) Cobb-Douglas Production Function 1) f(x 1 ,x 2 )=Ax 1 a x 2 b 2) Graph of isoquants:
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 10/26/2008 for the course ECON 3130 taught by Professor Masson during the Fall '06 term at Cornell University (Engineering School).

### Page1 / 3

Chapter 18 Technology - Chapter 18 Technology 18.1)Inputs...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online