prod_and_cost_i

prod_and_cost_i - Overview: Production and Cost I...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Overview: Production and Cost I • Production Processes – Trade-offs among inputs • Economic versus Accounting Profits – Key: Opportunity Cost • Cost Concepts – Marginal, Total, Variable, Fixed, Sunk – Averages & Relationships – Long Run Versus Short Run
Background image of page 1

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

View Full DocumentRight Arrow Icon
Production What are some examples of production processes? Production function: Q=f(K,L) Represents technology to transform inputs into an output. Trade-offs in Inputs - Isoquants Why would we care?
Background image of page 2
Background image of page 3

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

View Full DocumentRight Arrow Icon
Profits Definition: Profits = Revenues – Costs • Okay, what are Revenues and Costs? • Accountants versus Economists Accounting Depreciation Life Life K Z I Capital “value” Rules for “writing off” capital expenses Other methods Issue: appropriate values reflected? Divergent results straight line “Depreciation”
Background image of page 4
• Definition: – Highest value that could be received for an input – ‘Best alternative use’ is comparison •Ex amp l
Background image of page 5

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

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/20/2011 for the course SLOAN 15.010 taught by Professor Berndt during the Fall '04 term at MIT.

Page1 / 13

prod_and_cost_i - Overview: Production and Cost I...

This preview shows document pages 1 - 6. Sign up to view the full document.

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