class 10 post

class 10 post - MRTS: Marginal Rate of Technical...

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Class 10 Costs
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Announcements idterm: ± Midterm: ± Post-exam review: Feb 12, 6-8pm Lorch 140 ± ean: 194 Points out of 300 (B) Mean: 194 Points out of 300 (B) ± Syllabus: e: Chapter 8 ± We: Chapter 8 ± CLRT ± Wednesday: In Class Feedback ± Problem Set 8
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Outline roduction ± Production ± Cost ± Cost Functions
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Production K K 2 1 L L 2 1 q (L,K) L
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Production K K 2 1 L L 2 1 q (L,K) L
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Outline roduction ± Production ± Costs ± Cost Functions
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Costs Cost: K 3 4 Capital: r=2, Labor: w=1 X(K,L)=rK+wL 2 1 Optimum: 2 3 4 L Graphical: MRTS= -w/r Formal: C(q)=min X(K,L) (q) 1 s.t. F(K,L)=q RTS: C(q) MRTS: Marginal Rate of Technical Substitution q
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Costs Cost: Capital: r=2, Labor: w=1 X(K,L)=rK+wL Optimum: Graphical: MRTS= -w/r Formal: C(q)=min X(K,L) s.t. F(K,L)=q RTS
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Unformatted text preview: MRTS: Marginal Rate of Technical Substitution Outline roduction Production Cost Cost Functions Cost Functions C(q) Types of Cost AFC: Average Fixed Costs TC: verage Total Costs Variable Cost ATC: Average Total Costs AVC: Average Variable Costs MC: Marginal cost Fixed cost F 4 q C(q) ATC AVC=MC AFC q Cost Functions C(q) Economies of Scale: If q increases by x%, suppose C(q) increases by F less than x%: Increasing Economies of scale exactly x%: Constant Economies of scale th % q 4 more than x%: Decreasing Economies of scale C(q) MC q ATC...
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This note was uploaded on 12/10/2011 for the course ECON 401 taught by Professor Burbidge,john during the Winter '08 term at Waterloo.

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class 10 post - MRTS: Marginal Rate of Technical...

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