微观经济学及财务知识分析规范.pptVIP

Chapter 1 Chapter 6 Production Topics to be Discussed The Technology of Production Isoquants Production with One Variable Input (Labor) Production with Two Variable Inputs Returns to Scale Introduction Our focus is the supply side. The theory of the firm will address: How a firm makes cost-minimizing production decisions How cost varies with output Characteristics of market supply Issues of business regulation The Technology of Production The Production Process Combining inputs or factors of production to achieve an output Categories of Inputs (factors of production) Labor Materials Capital The Technology of Production Production Function: Indicates the highest output that a firm can produce for every specified combination of inputs given the state of technology. Shows what is technically feasible when the firm operates efficiently. The Technology of Production The production function for two inputs: Q = F(K,L) Q = Output, K = Capital, L = Labor For a given technology Isoquants Assumptions Food producer has two inputs Labor (L) Capital (K) Isoquants Observations: 1) For any level of K, output increases with more L. 2) For any level of L, output increases with more K. 3) Various combinations of inputs produce the same output. Isoquants Isoquants Curves showing all possible combinations of inputs that yield the same output Production Function for Food 1 20 40 55 65 75 2 40 60 75 85 90 3 55 75 90 100 105 4 65 85 100 110 115 5 75 90 105 115 120 Production with Two Variable Inputs (L,K) Isoquants The isoquants emphasize how different input combinations can be used to produce the same output. This information allows the producer to respond efficiently to changes in the markets for inputs. Isoquants Short-run: Period of time in which quantities of one or more production factors cannot be changed. These inputs are called fixed inputs. Isoquants Long-run Amount of time needed to make all production inputs variable. Production withOne Variable Input (Lab