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【正文】 c contours z 1 z 2 Q t z 2 t z t Q r 1 G(t z) = t G(z) r Contours of a homogeneous function ?The isoquants form a contour map. ?If we looked at the “parent” diagram, what would we see? ?Let39。李永波 The Firm: Production Advanced MicroEconomics In this lecture we set out some of the elements needed for an analysis of the firm ?Technical efficiency ?Returns to scale ?Convexity ?Substitutability ?Marginal products ...and (for next time) assuming a petitive environment. We do it within the context of a singleoutput firm... But first we need the building blocks of a model... The basics of production... z i amount of input i Q amount of output The basics of production... input vector z := (z1 ,z2 ,...,zm) w i price of input i w := (w1 ,w2 ,...,wm) input price vector P price of output Notation: Prices Q ?? G(z1, z2, ...., zm ) The singleoutput production function Written more pactly Q ? G(z) technology output Yes, but why not = sign here? inputs The meaning of the function the maximum amount of output that can be produced from this list of inputs Use this relation to distinguish two cases... Components of the relationship
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