微观经济学第七版(平狄克版)课后习题答案_第七章.pdfVIP

Chapter 7: The Costs of Production CHAPTER 7 THE COST OF PRODUCTION TEACHING NOTES This chapter is packed with new terms and concepts, and it will take some time to go through carefully. You might remind students that you are still building the underpinnings of supply and, for that purpose, it is critical to understand how firms make production decisions. Some key topics in the chapter are accounting versus economic costs; total, average and marginal costs in the short and long run; and choosing the least-cost combination of inputs (graphically in the chapter, and mathematically in the appendix). Other topics include economies of scope, the learning curve and estimation of cost functions. You may omit some of these additional topics without disrupting the flow of the book if you want to save time for other issues later in the course. To get started, it is important to distinguish between accounting and economic costs so that students will understand that zero (economic) profit is a reasonable long-run equilibrium in perfect competition (Chapter 8). Opportunity cost is crucial for understanding this distinction. Two examples given in the chapter are the opportunity cost of a business owner’s time and the opportunity cost of utilizing capital. The opportunity cost of capital, i.e., the rental rate on capital, may well be the same whether the firm owns or rents the capital and is a source of confusion. It is important, therefore, to distinguish between the purchase price of capital equipment (or its depreciation as determined by accounting rules) and the opportunity cost of using the equipment. Also remind students that the rental rate on c