slides_08_H.pdf - Recap PRODUCER BEHAVIOR(I • We...

This preview shows 1 out of 3 pages.

PRODUCER BEHAVIOR (I) 1 Recap We completed a four-part analysis of consumer behavior - Preferences and rationality axioms - Representation of rational preferences: utility - Affordable bundles: budget set - Consumer choice: utility maximization and individual demand - Market demand Next: a similar analysis of firm behavior (production decisions) 2 Outline (today) Firms’ decisions Production function Average and marginal product Technical change 3 Outline (today) Firms’ decisions Production function Average and marginal product Technical change 4
Image of page 1

Subscribe to view the full document.

Firm’s decisions Economics (narrow) model of firms: transform inputs into outputs - Examples of inputs: land, labor, capital, raw materials, energy - Examples of outputs: cars, strategy consulting services Input choice: for a given output level and input prices, optimal choice of input levels (minimize cost) Output choice: optimal output level (later in semester) 5 Also important: economic analysis of firm as an organization Outline (today) Firms’ decisions Production function Average and marginal product Technical change 6 Production function How input quantities are related to output quantities. In other words, how inputs can be transformed into outputs Usually focus on two inputs, capital ( K ) and labor ( L ) Also, K and L can be disaggregated by type q = F ( K , L ) where q
Image of page 2
Image of page 3
You've reached the end of this preview.
  • Fall '15
  • ANDREWPAIZIS
  • Economics, AP, Economics of production, Bureau of Labor Statistics

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern