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17 Cards in this Set
- Front
- Back
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Name 3 Return to Scale (RTS)
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1. Increasing RTS
2.Constant RTS 3. Decreasing RTS |
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Give N, L, K and Q meanings for the 3 RTS.
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1. 2N, 2l, 2K = 3Q
2. 2N, 2l, 2K = 2A 3. 2N, 2l, 2K = 1.5Q |
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Graph income leisure trade-off,and label each axis.
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tax effect
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CE:
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MUa = MUb = MUe
Pa Pb Pe Qa Qb Qe |
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Degine Marginal Revenue Products of labor.
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Pn * MPn
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ATC=
AFC= AVC= MC= |
TC/Q
FC/Q VC/Q shiftTC/shiftQ |
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what is LRATC?
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Long Run Average Total Cost.
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What is the name of the thereom? Who invented it?
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Envelope thereom, Slutsky invented it.
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Graph indifference Curve. Provide the ratios. Do the curves touch?
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On the indifference curve they touch at only 1 point. That point is -MUx/MUy =
-Px/PY |
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Define Physical Capital and Human Capital.
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Physical Capital - "K", machinery equipment.
Human Capital - "N", EE skill based. |
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Name 4 out 6 Characteristics of pure/perfect competition.
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1. lots f sellers, 2. homegenous products, 3. easy entry/exit, 4. price taker, 5. no economic profit
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Define Marginal Rate of Substitution
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MRSx,y = -MUx/MUy
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What is the shut-down rule?
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TC TR VC, stay in business for SR
TC TR VC, shut down in the LR. TR VC, shut down NOW! |
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What is Substitution Effect and what is Income Effect?
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Px Qx Qy
Px DisposableIncome Qx Qy |
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Define Factor Distribution of Income.
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MPl/Pl MPn/Pn MPk/Pk
Ql Qn Qk |
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Define 3 compensating wage of differential
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1. skill level
2. danger 3. fun level |
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Use #11 and now the price of beer is $2.50 Was this a partial shift or full shift? what is partial and fullshift?
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Partial shift
partial shif in 1 price only full shift in both prices or shift in income. |
