Microeconomic Theory Final

question

Producer Theory

answer

firms constraints when it comes to maximizing profits and minimizing costs

question

production function

answer

the relationship between quantity of inputs used to make a good and the quantity of output of that good

question

isoquants

answer

curve showing all possible combinations of inputs that yield the same output

question

Monotonicity

answer

if you increase the amount of one input you should still be able to produce at least as much output as before

question

convexity

answer

a weighted average of two production methods will produce at least as much output as either of the methods alone

question

marginal product

answer

the extra output or change in total product caused by the addition of one more unit of variable input

question

Technical Rate of Substitution

answer

the rate at which a firm will have to substitute one input for another in order to keep output constant

question

TRS condition

answer

for smooth production functions the ratio of marginal products to input prices is the necessary condition for tangency

question

diminishing marginal product

answer

the property whereby the marginal product of an input declines as the quantity of the input increases

question

diminishing technical rate of substitution

answer

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

answer

when long-run average total cost is constant as output increases f(αx1, αx2)=αf(x1,x2)

question

increasing returns to scale

answer

when long-run average total cost declines as output increases f(αx1, αx2)>αf(x1,x2)

question

decreasing returns to scale

answer

when long-run average total cost increases as output increases f(αx1, αx2)<αf(x1,x2)

question

profit

answer

total revenue minus total cost

question

profit maximization criteria

answer

value of the marginal product of an input must equal its cost: PMP1(x1, x2)=W1

question

conditional factor demand

answer

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

answer

derivative of the cost function wrt y

question

firm supply function

answer

output as a function of price y=S(P)

1 of 18

question

Producer Theory

answer

firms constraints when it comes to maximizing profits and minimizing costs

question

production function

answer

the relationship between quantity of inputs used to make a good and the quantity of output of that good

question

isoquants

answer

curve showing all possible combinations of inputs that yield the same output

question

Monotonicity

answer

if you increase the amount of one input you should still be able to produce at least as much output as before

question

convexity

answer

a weighted average of two production methods will produce at least as much output as either of the methods alone

question

marginal product

answer

the extra output or change in total product caused by the addition of one more unit of variable input

question

Technical Rate of Substitution

answer

the rate at which a firm will have to substitute one input for another in order to keep output constant

question

TRS condition

answer

for smooth production functions the ratio of marginal products to input prices is the necessary condition for tangency

question

diminishing marginal product

answer

the property whereby the marginal product of an input declines as the quantity of the input increases

question

diminishing technical rate of substitution

answer

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

answer

when long-run average total cost is constant as output increases f(αx1, αx2)=αf(x1,x2)

question

increasing returns to scale

answer

when long-run average total cost declines as output increases f(αx1, αx2)>αf(x1,x2)

question

decreasing returns to scale

answer

when long-run average total cost increases as output increases f(αx1, αx2)<αf(x1,x2)

question

profit

answer

total revenue minus total cost

question

profit maximization criteria

answer

value of the marginal product of an input must equal its cost: PMP1(x1, x2)=W1

question

conditional factor demand

answer

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

answer

derivative of the cost function wrt y

question

firm supply function

answer

output as a function of price y=S(P)

Continue to order Get a quote

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.

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Microeconomic Theory Final

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee