Lecture 3

Question 1

Factors Affecting Input Demand

Answer 1

Price of output produced +
ownprice of input -
price of input substitutes + price of input compelemnt-
technology parameters of production +

Question 2

output price elasticity of input demand

Answer 2

responsive ness of qd of input to changes in output price

Question 3

output price elasticity of input demand formula

Answer 3

ex,p derivative of lnx wrt lnp

Question 4

own price elasticity of input demand

Answer 4

measures the responsiveness of the qd of an input to changes in the price of that input

Question 5

own price elasticity of input demand formula

Answer 5

ex1v1=derivative of lnx wrt lnv1

Question 6

cross price elasticity of input demand

Answer 6

measures the responsiveness of the qd of an input to changes in the price of other input

Question 7

cross price elasticity of input demand formula

Answer 7

ex1,v2 = derivative of x1 wrt v2

Question 8

technical relationship of inputs

Answer 8

complement substitute independence

Question 9

technical complements

Answer 9

derivative of mpp 1 wrt x2>0

Question 10

technical substitute

Answer 10

derivative of mpp1 wrt x2 <0

Question 11

technical independence

Answer 11

derivative of mpp1 wrt x2 =0