Econ475PS1 - Middle East Technical University Department of...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Middle East Technical University Department of Economics ECON 475-Introduction to Mathematical Economics Fall 2009-2010 Problem Set 1 Ebru Voyvoda and Ozlem Tonguc 1. In the Theory of the Firm, we consider the total cost, C to be a function of output level Q : C = f ( Q ) (a) According to the definition of a function, should each cost figure be associated with a unique level of output? (b) Should each level of output determine a unique cost figure? Explain. 2. If an output level Q 1 can be produced at a cost of C 1 , then it must also be possible (by being less efficient), to produce Q 1 at a cost of say, C 1 + a , a > 0. Thus, it seems that each level of output does not uniquely determine a total cost value, but a set of values. If so, wouldn’t it be that to write C = f ( Q ) violate the definition of a function? How, in spite of this reasoning can you justify the use of cost function, C = f ( Q )?...
View Full Document

This note was uploaded on 05/26/2010 for the course ECON 475 taught by Professor Voyvoda during the Spring '10 term at Middle East Technical University.

Page1 / 2

Econ475PS1 - Middle East Technical University Department of...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online