This preview shows page 1. Sign up to view the full content.
Unformatted text preview: 5. Z is a convex set. (This assumption embodies decreasing margi-nal productivity. Together with the assumption that 0 ∈ Z , it implies nonincreasing returns to scale : if z ∈ Z , then for every λ < 1, λ z ∈ Z .) The Production Function Consider the case in which commodity K is produced from com-modities 1, . . . , K − 1, that is, for all z ∈ Z , z K ≥ 0 and for all k 6= K , z k ≤ 0. In this case, another intuitive way of specifying the techno-...
View Full Document
This note was uploaded on 12/29/2011 for the course ECO 443 taught by Professor Aswa during the Fall '10 term at SUNY Stony Brook.
- Fall '10