Lecture 4.1

Question 1

The cost associated with the purchase of variable inputs

Answer 1

Variable costs

Question 2

cost that must be incurred by the farmer whether or not production takesplace

Answer 2

fixed cost

Question 3

Variable cost is represented by

Answer 3

VC=g(y)

Question 4

Fixed cost is represented by

Answer 4

FC=K constant peso value

Question 5

Total Cost

Answer 5

TC=VC+FC

Question 6

AVERAGE VARIABLE COST

Answer 6

VC/y

Question 7

Average Fixed Vost

Answer 7

AFC= FC/y

Question 8

Average total cost(AC)

Answer 8

AC= TC/y or AVC+AFC

Question 9

The shape of the ** depend k. the characteristics of the underlying production function or technology

Answer 9

cost curves

Question 10

the cost curves are mirror image of the **

Answer 10

production curves

Question 11

PF reflects * *****

Answer 11

incremental unit of input produces less and less additional output

Question 12

VC funcstion reflects b

Answer 12

incremental unit of output becomes more and more costly in terms of input requirement

Question 13

How to derive cost function One inout case

Answer 13

Given function
get inverse
multiply it by the price of the input

Question 14

how to derive the cost function two input case

Answer 14

1. derive the expansion path
   substitute expansion path to y
   invert to get x1 and x2
   substitute x1 x2 in general VC equation

Question 15

measures the responsiveness of variable cost to changes in output

Answer 15

Ec elasticity of cost

derivative of VC wrt Y