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Presentation transcript:

1 Welcome to EC 209: Managerial Economics- Group A By: Dr. Jacqueline Khorassani Study Guide Week Five (Note: You must go over these slides and complete every task outlined here before Thursday, October 4)

2 Don’t forget that Aplia Assignment 2 –Due date is pushed back to before noon on Wednesday, October. –Don’t miss it. –To maximize your assignment grade, do the practice question first –The special tutorial on Monday will take place between 6 and 8 p.m. in Kirwan theatre.

3 Chapter 4: Applications of Indifference Curve Analysis 1.Buy one, Get One Free 2.Cash vs. In-kind Transfers 3.Labour-leisure choice –What is a budget constraint? Slope Shifts –How do wages affect labor supply?

4 Chapter 5: 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?

5 What are total, marginal and average product of labor or capital in the short run? Definitions? Graphs? Increasing, Diminishing and Negative Marginal Returns

6 What should a manager do? What is the value of marginal product? –How does that relate to the manager’s decision?

7 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?

8 Cost in long run Isocost –What is it? –Shape/slope? Reasons?

9 Cost minimization Rule? Graph? Optimal input substitution? –Graph?

10 Cost function in the short run What are the different types of costs? –Graphs?

11 Cubic Cost Function What is it?

12 Long Run Costs Economies/diseconomies of scale –Sources? –Graph?

13 Multi-Product Cost Function What are they? What is the economies of scope? What is cost complementarity? What is the Quadratic Multi-Product Cost Function?