chapter18 - Intermediate Micro II Instructor: Prof Berta...

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Econ 2350M Winter 2009 1 Intermediate Micro II Instructor: Prof Berta Esteve-Volart Department of Economics, York University Chapter 18 – Technology Note: Only for students of Econ 2350M
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Econ 2350M Winter 2009 2 Isoquant • Set of all possible combinations of inputs 1 and 2 that are just sufficient to produce a given amount of output
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Econ 2350M Winter 2009 3 Examples of Technology • Fixed Proportions : f(x 1 ,x 2 )=min{x 1 ,x 2 } x 1 =men, x 2 =shovel
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Econ 2350M Winter 2009 4 • Perfect Substitutes : f(x 1 ,x 2 )=x 1 +x 2 x 1 =red pencils, x 2 =blue pencils
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Econ 2350M Winter 2009 5 • Cobb-Douglas : b a x Ax x x f 2 1 2 1 ) , ( = X 1 X 2
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Econ 2350M Winter 2009 6 Properties of Technology (Assumptions) • Monotonic: if increase at least one input, should get at least as much output • Convex: if two ways to produce y units of output, (x 1 ,x 2 ) and (z 1 ,z 2 ), it should be possible to get at least y with a weighted average of the two Æ isoquants convex:
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Econ 2350M Winter 2009 7 Input 1 Input 2 10 100 10 80
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This note was uploaded on 01/26/2011 for the course ECON 1111 taught by Professor Fertar during the Spring '10 term at Memorial University.

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chapter18 - Intermediate Micro II Instructor: Prof Berta...

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