KEK/MI2PE - Microeconomics II (2022) (ENGLISH)

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.

    i) 

    ii)  

    iii)  

    iv)  

    v)  

    vi)  

    vii)  

    viii)  

    ix)  

    x)  
    xi)  
    xii)  
    xiii)  
    xiv)  .  Completely optional reading which will not be

                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.

    i)  

.  Note that the lines representing constant total cost

        (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.

    ii)  

    iii)  

    iv) 

    v) 

    vi) 

    vii) 

. The handout is page 5 of "Class Handouts."

    viii)  

. The handout for this video and the next one is

            page 6 of "Class Handouts."

    ix)  

    x)  

    xi)  

.  This concerns page 7 of the "Class Handouts,"

            "How Short-Run Total Cost Curves could cross."

    xii)  

.  See page 8 of the "Class Handouts."

    xiii)  

    xiv)  

    xv)  

.  See the top of page 9 of the "Class Handouts."

    xvi)  

.  See the bottom of page 9 of the "Class Handouts."

    xvii)  

.  See page 10 of the "Class Handouts."

    xviii)  

    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.

    i)  

    ii)  

    iii)  

    iv)  

    v)  

    vi)  

    vii)  

    viii)  

    ix)  

.  See the left-hand side of p. 12 of the "Class Handouts."

    x)  

.  See the right-hand side of p. 12 of the "Class Handouts."

    xi)  

.  See the left-hand side of p. 11 of the "Class Handouts."

    xii)  

.  See the right-hand side of p. 11 of the "Class Handouts."

    xiii)  

    xiv)  

    xv)  

    xvi)  

    xvii)  

    xviii)  Optional video (not on Exam 2):  

    xix)