PRODUCTION AND COST THEORY
Suppose we have a simple production process wherein a variable quantity of labor (L) is
used with a fixed stock of capital (K*). We may write this as Q = f(K*, L) . A Ageneric@
graph of a production function
THE (REALLY) BIG HISTORICAL PICTURE
It is widely believed that life originated on earth approximately 3.7 billion years ago and
biologists estimate that there may be 15 million species of organism in the worldabout 2 million
of which are named plant/anima
PRICE ELASTICITY OF DEMAND
The Law of Demand (i.e., holding everything else constant, the higher is the price of a good, the less
consumers will purchase) is one of the most important concepts of microeconomics.
The most commonly used measure of consumers
1A VERY BRIEF OUTLINE OF THE HISTORY OF ECONOMIC THOUGHT
Major theme is Aeconomics as justice@.
*natural (oikonomia) vs. unnatural (chrematistics)
*sterility of money (usury as vice)
*just price (no gain on exchange)
*use value vs. exchan
CHANGES IN DEMAND vs. CHANGES IN QUANTITY DEMANDED
A change in quantity demanded is reflected in the movement along a particular demand curve. Thus
a change in quantity demanded is caused only by a change in the price of the good. A change in
demand is re
THE PERFECTLY COMPETITIVE FIRM
We will initially assume that the seller (firm) is perfectly competitive.
perfectively competitive model includes the following assumptions:
* There are many sellers-enough so that no single seller acting alone can influ
COMPARATIVE STATICS: CHANGES IN SUPPLY & DEMAND AND
THEIR IMPACT ON EQUILIBRIUM
Economists rely heavily upon the method of comparative statics. In brief, it is
described as follows:
Begin with model in equilibrium
Introduce some "disturbance"
Monopoly market structure
Monopoly is a market structure characterized by a single seller, selling a
unique product in the market. In a monopoly market, the seller should face no
competition, and be the only seller of goods with no close s
You could choose to address the following questions in your post: How does management solve problems in
the organization where you work? Are problems solved by use of guesswork? By application of undeveloped
theories based primarily on "one-size-fits-all
Carlos Santos, Charles Snelling, David Yonk
Question 1. Based on the equation at the bottom of page 4, what is your assessment of
the variables included in the author's' demand model? Please discuss each variable
Below, we individually discuss th
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