Review Sheet Quiz II '16

 

Deriving Cost Curves from Isoquants

The Firm

Revealed Preference

Stated Preference

Welfare Theorem

 

 

Assume price of OS is 2.  What are the costs of Q1, Q2, and Q3?

TBES.  Star is an inefficient technology that limits air to 20 units.  Emit standard is 20.  Best response is 20,50.

Cost is higher than least cost but usually lower than the technology used as the base.

Now draw one more line that shows how to get the (20,50) technique by raising the cost of air.

Readings

So far we read Krutilla.