Lecture 9 _ 10, chapters 11-13

Lecture 9 _ 10, chapters 11-13 - Econ 100A Microeconomics...

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k Econ 100A – Microeconomics Professor Sarah Reynolds Department of Economics University of California, Berkeley Textbook by Thomas Nechyba Production Chapter 11 & 12 – February 22 th , 2011 In the first portion of class, we saw how consumers decided how much to consume. Now we move on to how producers decide how much to consume. The analysis is done at the level of the firm . The Engineer Production function x=f(l,k) Assumption: Diminishing marginal product Isoquant – All the different “bundles” of inputs that produce the same quantity of output Assumption: Concavity A graph of a concave isoquant: l
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One important difference from utility functions: The implication for homothetic functions: Definition of homothetic: k<1 k=1 k>1 Example Implication for production Implication for size of firm Economic Name Returns to Scale vs. Diminishing Marginal Product
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This note was uploaded on 09/11/2011 for the course ECON 100A taught by Professor Woroch during the Spring '08 term at University of California, Berkeley.

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Lecture 9 _ 10, chapters 11-13 - Econ 100A Microeconomics...

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