Lecture+13+October+19

Lecture+13+October+19 - Todays Agenda Production functions:...

Info iconThis preview shows pages 1–23. Sign up to view the full content.

View Full Document Right Arrow Icon
Today’s Agenda Production functions: total, average and marginal productivity Short run cost functions 3 total cost functions: STC, TVC, TFC 3 average cost functions: SATC, AVC, AFC Marginal cost function: SMC
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 functions Long run : all inputs can be varied Q = F(K, L)
Background image of page 2
Production functions Long run : all inputs can be varied Short run : some inputs cannot be varied Q = F(K, L) Q = F(K, L)
Background image of page 3

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

View Full DocumentRight Arrow Icon
Production functions Long run : all inputs can be varied Short run : some inputs cannot be varied Total product of labor Q = F(K, L) Q = F(K, L) Q = F(K, L) = TP L
Background image of page 4
() 1000 1000 100 100 , 4 64 25 2 3 2 3 3 2 3 2 3 1 3 2 3 1 Q L L Q L Q L L K F TP K K L K Q 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
() 1000 1000 100 100 , 4 64 25 2 3 2 3 3 2 3 2 3 1 3 2 3 1 Q L L Q L Q L L K F TP K K L K Q L = = = = = = = =
Background image of page 6
() 1000 1000 100 100 , 4 64 25 2 3 2 3 3 2 3 2 3 1 3 2 3 1 Q L L Q L Q L L K F TP K K L K Q L = = = = = = = =
Background image of page 7

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

View Full DocumentRight Arrow Icon
() 1000 1000 100 100 , 4 64 25 2 3 2 3 3 2 3 2 3 1 3 2 3 1 Q L L Q L Q L L K F TP K K L K Q L = = = = = = = =
Background image of page 8
() 1000 1000 100 100 , 4 64 25 2 3 2 3 3 2 3 2 3 1 3 2 3 1 Q L L Q L Q L L K F TP K K L K Q L = = = = = = = =
Background image of page 9

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

View Full DocumentRight Arrow Icon
Total product of labor Q L TP L
Background image of page 10
Total product of labor Q L TP L Why concave? Diminishing returns to labor
Background image of page 11

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

View Full DocumentRight Arrow Icon
Total product of labor Q L TP L K=K' TP L K=K" K' > K"
Background image of page 12
Average and marginal products TP L = F(K, L)
Background image of page 13

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

View Full DocumentRight Arrow Icon
Average and marginal products TP L = F(K, L) AP L = TP L L
Background image of page 14
Average and marginal products TP L = F(K, L) AP L = TP L L MP L = Δ TP L L
Background image of page 15

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

View Full DocumentRight Arrow Icon
Average product Q L TP L K=K'
Background image of page 16
Average product Q L TP L K=K' L 0 TP(L 0 )
Background image of page 17

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

View Full DocumentRight Arrow Icon
Average product Q L TP L K=K' L 0 TP(L 0 )
Background image of page 18
Average product Q L TP L K=K' L 0 TP(L 0 ) Average product is the slope of a ray from the origin to the TP L
Background image of page 19

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

View Full DocumentRight Arrow Icon
Marginal product Q L TP L K=K' L 0 TP(L 0 )
Background image of page 20
Marginal product Q L TP L K=K' L 0 TP(L 0 ) Marginal product at L 0 is the slope of the tangent at L 0
Background image of page 21

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

View Full DocumentRight Arrow Icon
Relation between AP L and MP L Q L TP L K=K' L 0 TP(L 0 )
Background image of page 22
Image of page 23
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/10/2011 for the course ECON 220:102 taught by Professor Rubin during the Fall '11 term at Rutgers.

Page1 / 58

Lecture+13+October+19 - Todays Agenda Production functions:...

This preview shows document pages 1 - 23. Sign up to view the full document.

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