Microeconomics II Term 2 (BEE2025)

Microeconomics I
Term 2

,Technology y
=
f(x)
Technology/
-




Y
amount of input

l
xi >
- i
production set
fce ... n) Tortput]
T




y =

Sensible
↳
production function
i
*
x,
⑫

· Feasible Prod . Plan :
(D , .
. . , , j)/y = f(x , . .
. n)
·

Technology set :
T = .
.
.
,
.




3y = fa .... x)


Frame
x, = 0
....,x = 0 !
i =
11 2 %
Isoquant of possible combinations of
,


: set

f(x ,) inputs produce output
-




y that given
↑
= a

, C2 k '
y" y"
x

y Axi
f(
=

A A ,
x) =


7 ⑨



y"
=
*
y (x ,*, )
Cobb-Douglas
=
xe ↳



x y y =
(
(x)
=
3
B
,


sit

level of inputs firm produce at least as
much
Monotonicity
increase can
↳ :
,




output as it was
originally
·
Fixed proportion :
y
= mini pay .




Ih = xx , Bel
produce
=


↳ increase both ,
more

y y
=


D
Il


2 ---oB y Y
=
①
-




-T
-C I


y
1--- 3
=




< 1 = Labour
1 2

, Substitutes
·

perfect :

y
= x + Ba

Bx
x2x y = xx ,
+




x =


G
3"
y
y
7 I,
line from bundle to bundle
-
isogrant
On a


↳
Convexity linear combination of inputs
Any will
produce at least
:




the same amount
of output .




*
Marginal product :
rate of change of atput as level of input :

rises while all others are held constant

MP :
=