ajaz_eco_204_2012_2013_chapter_12_Long_Run_CMP

Problem this version 2012 2013 university of toronto

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Unformatted text preview: ction will expand inputs along the following single linear inputs expansion path (this is the only path which minimizes the cost of production): () [ () [ [ ⏟ [ [ [ [ ) plot and traces the locus of the optimal bundles of labor This is a linear expansion path which can be plotted in a ( and capital required to produce a target output. For example the following table shows the slope of the long-run CobbDouglas CMP linear inputs expansion path: Tobacco Products 0.18 0.33 0.51 1.83 Food and Kindred Products 0.43 0.48 0.91 1.12 Transportation equipment 0.44 0.48 0.92 1.09 Apparel and other textiles 0.70 0.31 1.01 (see note below) Furniture and fixtures 0.62 0.40 1.02 0.65 Electronics and electric equipment 0.49 0.53 1.02 1.09 Paper and allied products 0.44 0.65 1.09 1.48 Petroleum and coal products 0.30 0.88 1.18 2.93 Primary metal 0.51 0.73 1.24 1.43 Note: Margin of error is In this case may be considered to be “constant returns to scale” Recall that returns to scale tells us what happ...
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