Final Review 1 - Review Session I Explanations, Homeworks...

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Unformatted text preview: Review Session I Explanations, Homeworks and Examples. . , : can it as much as produce it would rational, is firm the As . , : labor and capital combine y to technolog a uses firm The L K f Q L K f L K 1 , : DRS Scale to Returns Decreasing 1 , : CRS Scale to Returns Constant 1 , : IRS Scale to Returns Increasing : scale to returns certain by featured is y technolog The L K f Q L K f Q L K f Q DRS L K Q L K Q L K Q L K Q L K Q L K Q L K Q L K Q L K Q CRS L K Q L K Q L K Q L K Q KL Q L K Q KL Q Examples 1 24 19 IRS 1 3 1 1 IRS 1 2 : 8 5 6 1 24 19 8 5 8 5 6 1 6 1 8 5 6 1 8 5 6 1 3 5 3 4 3 3 5 3 4 3 9 3 5 3 5 3 4 3 4 3 5 3 4 3 5 3 4 3 2 3 2 3 1 3 2 3 2 3 1 3 1 3 2 3 1 3 2 3 1 2 Q wL Q C VC K r FC output. of level with the that vary Costs : Costs Variable : output of level of t independen are that Costs : Costs Fixed variable are inputs all run, long In the Capital constant, remains input one run, short In the Q L w Q Q wL Q TC MC Q wL K r VC FC TC Q wL Q C VC : changes output as Cost Total in change the is cost Marginal : are costs total The Cost Variable Average Cost Fixed Average Cost Total Average : costs total the From AVC AFC ATC Q VC Q FC Q TC VC FC TC MC ATC Dollars AVC Output AFC TC Q wL K r PQ VC FC PQ TC TR MC P : n Calculatio...
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This note was uploaded on 02/03/2010 for the course ECON econ102a taught by Professor Bandy during the Winter '09 term at UC Riverside.

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Final Review 1 - Review Session I Explanations, Homeworks...

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