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 :
=
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 :
=
