DOC PREVIEW
UNC-Chapel Hill ECON 101 - Cost curves and the Production Function

This preview shows page 1 out of 2 pages.

Save
View full document
View full document
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience
Premium Document
Do you want full access? Go Premium and unlock all 2 pages.
Access to all documents
Download any document
Ad free experience

Unformatted text preview:

ECON 101 1st Edition Lecture 7 Cost curves and the Production FunctionThe expenditure line: for any given variation of prices, the different combinations availableProduction IsoquantsCost minimizing and input combinations Production Isoquantscapital labor ratio= slope of production Isoquants double amount of your product= move along the slope of the isoquantsproduce more output: use more capital and laborSlope of the Isoquants= -(Marginal product of labor/marginal product of capital)Cost minimizing and input combinations optimization: shifting the ration of labor and capital to more labor= lower the expenditure budge curve and the isoquants are tangent -(Price of Labor/Price of Capital)= -(Marginal product of Labor/Marginal product of Capital) Marginal Product of Labor/Price of Labor= Marginal Product of capital/ Price of Capital increase total expenditure: Total cost/ Price of capital Profit= total cost-total revenue slope of the total revenue curve= marginal revenueslope of the total cost curve= marginal costprofits are maximized: marginal revenue and marginal cost of a given output are equalPerfect competition: Perfectly competitive industry• firms are price takers (firms have no individually affected the marginal cost)These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.• There is freedom of entry and exit into this industry (very easy and low cost to get into an industry• Homogeneity of product (agriculture)• perfect information (no real trade secrets; can’t get a competitive edge that


View Full Document
Download Cost curves and the Production Function
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Cost curves and the Production Function and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Cost curves and the Production Function 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?