Econ212+Spring2013+Le_Linh+Notes_for_Week_09

This means that the isoquants will have the same sort

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Unformatted text preview: s to stay on the same isoquant, the technical rate of substitution declines. the slope of an isoquant must decrease in absolute value as we move along the isoquant in the direction of increasing x1, and it must increase as we move in the direction of increasing x2. This means that the isoquants will have the same sort of convex shape that well- behaved indifference curves have. The long run and the short run The short run: production plans that are immediately feasible (there will be some factors of production that are fixed at predetermined levels) The long run: production plans that are eventually feasible (all the factors of production can be varied) Returns to scale: Increasing, decreasing, and constant: > f ( t x ) < t f ( x ) =...
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This note was uploaded on 02/25/2014 for the course ECON 212 taught by Professor Mirobins during the Spring '08 term at Mt. Holyoke.

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