M. Muniagurria Econ 364 Microeconomics Handout (Part 1) I. TECHNOLOGY (1) : Production Function, Marginal Productivity of Inputs, Isoquants
Case of One Input: L (Labor): q = f (L) Let q equal output s
Production Function, Average and Marginal Products, Returns to Scale, Change of Variables Production Function: links inputs to amont of output. Assume we have 2 inputs: Labor (L) and Capital (K), and
M. Muniagurria MICROECONOMIC HANDOUT (Part 2) V. TWO SECTOR ECONOMY: PRODUCTION SIDE
(1)
Case of one input: L (Labor) - Assume 2 produced goods: M & F - Fixed amount of labor: L (Needs to be allocated
Patterns of Trade in H-O model. (The H-O Theorem)
1.) Construct 3 pp! for -a country.
It will look like this:
'Why the increasing opportunity costshape?
Lets think abodt this;
' A nice motivating p
Linear Regression
Linear regression attempts to model the relationship between two variables by fitting a linear equation to observed data. One variable is considered to
be an explanatory variable (or
Handout on HK calculation
Weil : Table 6.2 and Figures 6.9 and 6.10
According to Table 6.2 labor has seven different skill levels: Raw Labor (zero schooling) and 4 -8-10-12-14-16
years of schooling.
L
Ricardian Model Example used in lecture :
Consider a model with two countries (Home and Foreign (*) , two goods (Textiles and Soy) and one input
(Labor) . The production technologies are specified by
Specific Factors Models: Argument to show that an increase in the endowment of the specific factor decreases the real return (per unit) of both specific factors. Assumptions: (1) 3 factors : labor (L,
Econ 448
Instrumental variables - Human Capital
Pedro Hancevic
1
Instrumental Variables
Recall from previous discussion the linear regression model
y = 0 + 1 x +
(1)
with its main assumption: E(|x) =