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Presentation transcript:

1 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)

2 Don’t forget that Aplia Assignment 3 –Is due on Tuesday before 5 PM. –Don’t miss it.

3 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.

4 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?

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 complementarily? What is the Quadratic Multi-Product Cost Function?