Welcome to
EC 209: Managerial
Economics- Group A
By: Dr. Jacqueline Khorassani
Study Guide
Week Five
(Note: You must go over these slides and complete every
task outlined here before Thursday, October 4)
1
Don’t forget that
• Aplia Assignment 2
– Due date is pushed back to before noon on
Wednesday, October .
– Don’t miss it.
– To maximize your assignment grade, do the
practice question first
– The special tutorial on Monday will take place
between 6 and 8 p.m. in Kirwan theatre.
2
Chapter 4: Applications of Indifference Curve
Analysis
1. Buy one, Get One Free
2. Cash vs. In-kind Transfers
3. Labour-leisure choice
– What is a budget constraint?
•
•
Slope
Shifts
– How do wages affect labor supply?
3
Chapter 5: 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?
4
What are total, marginal and average
product of labor or capital in the short
run?
• Definitions?
• Graphs?
• Increasing, Diminishing and Negative
Marginal Returns
5
What should a manager do?
• What is the value of marginal product?
– How does that relate to the manager’s
decision?
6
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?
7
Cost in long run
• Isocost
– What is it?
– Shape/slope?
• Reasons?
8
Cost minimization
• Rule?
• Graph?
• Optimal input substitution?
– Graph?
9
Cost function in the short run
• What are the different types of
costs?
– Graphs?
10
Cubic Cost Function
•
What is it?
11
Long Run Costs
• Economies/diseconomies of scale
– Sources?
– Graph?
12
Multi-Product Cost Function
•
•
•
•
What are they?
What is the economies of scope?
What is cost complementarity?
What is the Quadratic Multi-Product Cost
Function?
13