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Six per page-Week 7_Part I_Econ2101_S1_2010

Six per page-Week 7_Part I_Econ2101_S1_2010 - Technology...

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1 Instructor/LIC: Arghya Ghosh E-mail: [email protected] Tel: 9385-1347 Office: ASB 406 Weeks: 7 -12 Theme: Production, Firms, Market Structure Technology and Profit Maximization Chapter 18: Technology Chapter 19: Profit Maximization Technology Production Functions Isoquants Marginal Product Returns to Scale Technical rate of substitution Long run and short run WEEK 7-Part I- ECON2101-S1 2010 3 Technology Technology describes how inputs are converted output. Lecture is being produced by using computer, projector, software, labour PRODUCTION FUNCTION: The maximum amount of output (y) one can produce using inputs x1, x2 ,… y f(x x ) y = f(x 1 , x 2 , … WEEK 7-Part I- ECON2101-S1 2010 4 Production Function One input, one output y = f(x) is the production y = f(x) is the production function. y = f(x) y’ y f(x) y’ = f(x’) is the maximal output level obtainable from x’ input units. x’ x from x input units. WEEK 7-Part I- ECON2101-S1 2010 x Input Level 5 Production Function with more than one input Labour and Capital used for manufacturing production Labour and Land for agricultural production How are different factors/inputs combined to produce output? ISOQUANTS : combination of different inputs that produce same level of output WEEK 7-Part I- ECON2101-S1 2010 6

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