Microeconomics: Theory of Business Decision-Making
F. The Technology of Production. The basis for the theory of the firm, this
describes in an abstract way the technical, "engineering" options which
are available to the firm.
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on any of our exams: Cambridge Capital Controversy.
G. Cost Functions. For a given level of output, firms minimize costs; this
sections describes the results. Determination of the optimal level of output
is postponed until Topic H. There are many graphs here.
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(for example, the lines marked TC_1, TC_2, TC_3, etc. near the end of this video)
are also called "isocost lines" because all points on each such line represent
equal total cost for the firm.
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page 6 of "Class Handouts."
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"How Short-Run Total Cost Curves could cross."
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An overview of Cost Curves is on page 4 of the "Class Handouts." You can ignore the
"Very Long Run" part of that page. Also, if you're having trouble understanding any
of the shapes covered in Topic G, recall that almost all of the shapes are treated on pages
1 and 2 of the "Class Handouts."
H. Profit. Given the results of Topic G, we can now determine what the firm can do
to maximize its profit. This results in supply curves, among other results.
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xviii) Optional video (not on Exam 2):
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