Microeconomic Theory Final - Custom Scholars
Home » Flash Cards » Microeconomic Theory Final

# Microeconomic Theory Final

question
Producer Theory
firms constraints when it comes to maximizing profits and minimizing costs
question
production function
the relationship between quantity of inputs used to make a good and the quantity of output of that good
question
isoquants
curve showing all possible combinations of inputs that yield the same output
question
Monotonicity
if you increase the amount of one input you should still be able to produce at least as much output as before
question
convexity
a weighted average of two production methods will produce at least as much output as either of the methods alone
question
marginal product
the extra output or change in total product caused by the addition of one more unit of variable input
question
Technical Rate of Substitution
the rate at which a firm will have to substitute one input for another in order to keep output constant
question
TRS condition
for smooth production functions the ratio of marginal products to input prices is the necessary condition for tangency
question
diminishing marginal product
the property whereby the marginal product of an input declines as the quantity of the input increases
question
diminishing technical rate of substitution
as we increase the amount of factor 1, and adjust factor 2 so as to stay on the same isoquant, the technical rate of substitution declines
question
constant returns to scale
when long-run average total cost is constant as output increases f(αx1, αx2)=αf(x1,x2)
question
increasing returns to scale
when long-run average total cost declines as output increases f(αx1, αx2)>αf(x1,x2)
question
decreasing returns to scale
when long-run average total cost increases as output increases f(αx1, αx2)<αf(x1,x2)
question
profit
total revenue minus total cost
question
profit maximization criteria
value of the marginal product of an input must equal its cost: PMP1(x1, x2)=W1
question
conditional factor demand
the relationship between the quantity of an input a cost-minimizing firm would employ and the input price for a given level of output
question
average cost function
derivative of the cost function wrt y
question
firm supply function
output as a function of price y=S(P)
1 of 18
question
Producer Theory
firms constraints when it comes to maximizing profits and minimizing costs
question
production function
the relationship between quantity of inputs used to make a good and the quantity of output of that good
question
isoquants
curve showing all possible combinations of inputs that yield the same output
question
Monotonicity
if you increase the amount of one input you should still be able to produce at least as much output as before
question
convexity
a weighted average of two production methods will produce at least as much output as either of the methods alone
question
marginal product
the extra output or change in total product caused by the addition of one more unit of variable input
question
Technical Rate of Substitution
the rate at which a firm will have to substitute one input for another in order to keep output constant
question
TRS condition
for smooth production functions the ratio of marginal products to input prices is the necessary condition for tangency
question
diminishing marginal product
the property whereby the marginal product of an input declines as the quantity of the input increases
question
diminishing technical rate of substitution
as we increase the amount of factor 1, and adjust factor 2 so as to stay on the same isoquant, the technical rate of substitution declines
question
constant returns to scale
when long-run average total cost is constant as output increases f(αx1, αx2)=αf(x1,x2)
question
increasing returns to scale
when long-run average total cost declines as output increases f(αx1, αx2)>αf(x1,x2)
question
decreasing returns to scale
when long-run average total cost increases as output increases f(αx1, αx2)<αf(x1,x2)
question
profit
total revenue minus total cost
question
profit maximization criteria
value of the marginal product of an input must equal its cost: PMP1(x1, x2)=W1
question
conditional factor demand
the relationship between the quantity of an input a cost-minimizing firm would employ and the input price for a given level of output
question
average cost function
derivative of the cost function wrt y
question
firm supply function
output as a function of price y=S(P)

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

## Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.