Lecture 6: The cost side of policy analysis Flashcards
1
Q
In a firm, how much labour should be hired? Should it be when labour productivity is maximised?
A
it does not matter whether productivity is decrease. The relevant condition is efficiency. If MPL>MCL then more should be hired
2
Q
What is an isoquant?
A
3
Q
What is the rate of technical substitution?
A
4
Q
What are the 4 commobly used production functions in economics
A
5
Q
Describe the 3 different types of returns to scale
A
