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Welcome to EC 209: Managerial Economics- Group A By: Dr. Jacqueline Khorassani. Study Guide Week Six (Note: You must go over these slides and complete every task outlined here before Thursday, October 11). Don’t forget that. Aplia Assignment 3 Is due on Tuesday before 5 PM.
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Welcome to EC 209: Managerial Economics- Group ABy:Dr. Jacqueline Khorassani Study Guide Week Six (Note: You must go over these slides and complete every task outlined here before Thursday, October 11)
Don’t forget that • Aplia Assignment 3 • Is due on Tuesday before 5 PM. • Don’t miss it.
Remember • Last week I made a mistake and planned to move to Chapter 5 of Baye after we finished Chapter 4 of Baye. • In reality, we ended up covering Chapter 8 of Frank. • This week, I will have a few more things to say on Chapter 8 of Frank and the article published in Economist, and then we will move to Chapter 5 of Baye.
Chapter 5 of Baye: Production Analysis • What is a production function? • How is short-run different from long run? • What is the difference between fixed /variable factors of production? • What is a Cobb- Douglas production function? • What is a Leontief production function?
What are total, marginal and average product of labor or capital in the short run? • Definitions? • Graphs? • Increasing, Diminishing and Negative Marginal Returns
What should a manager do? • What is the value of marginal product? • How does that relate to the manager’s decision?
Long Run Production Function • Isoquant • What is it? • Shape? • Reasons for different shapes? • What is the marginal rate of technical substitution • Why does it diminish?
Cost in long run • Isocost • What is it? • Shape/slope? • Reasons?
Cost minimization • Rule? • Graph? • Optimal input substitution? • Graph?
Cost function in the short run What are the different types of costs? Graphs?
Cubic Cost Function • What is it?
Long Run Costs • Economies/diseconomies of scale • Sources? • Graph?
Multi-Product Cost Function What are they? What is the economies of scope? What is cost complementarily? What is the Quadratic Multi-Product Cost Function?