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Unformatted text preview: RTS = [( @F=@x 1 ) = ( @F=@x 2 )] F 1 =F 2 : In the case where q = x & 1 x 2 , RTS = ( &= )( x 2 =x 1 ) The convex" case: write U ( q ) = f ( x 1 ; x 2 ) & 0 : F ( x 1 ; x 2 ) & q g : We say that the technology of the &rm described by the production function is convex if for any two points in U ( q ) the line joining the two points is entirely in U ( q ) : More formally; let (& x 1 ; & x 2 ) and (~ x 1 ; ~ x 2 ) are in U ( q ) : Then; for any in (0,1), ( & x 1 + (1 )~ x 1 ; & x 2 + (1 ) ; ~ x 2 ) is in U ( q ) : ** Indi/erence curves cannot interesect*** 1...
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 Fall '06
 MASSON
 Microeconomics

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