3-25-09 - Know what the production functions look like For...

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Microeconomics – Class Notes – 3/25/09 Finish chapter #7 today TC = (WL)*(L) + (WK)*(K) If he gives you an equation with only one variable, then that means the production function is in the short run (only one variable can change) Transforming a production function as a function inputs into a production function as a function of outputs
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Perfect Substitutes:
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ONLY WORKING WITH: Cobb-Douglas, Perfect Substitutes, and Fixed Proportions… …for production functions. Know what these equations look like
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Unformatted text preview: Know what the production functions look like For C-D, you need calculus in order to determine the production function Need to find the Tangency point between isoquant and isocost: Q = 100 Least cost quantity RETURNS TO SCALE: Increasing returns to scale = inputs double, outputs more than double. Trying to find how much X and Y do I use to produce the desired amount of output (Q) at the LEAST-COST. FINISHED CHAPTER #7 Chapter #8 Profit Maximization and different market structures...
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3-25-09 - Know what the production functions look like For...

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