Kinh tế vi mô FTU - Lecture 8 9

Motivation Figure: Production of pineapple Microeconomics June 3, 2020 1 / 50 Motivation Figure: iPhone supply chain by Apple Microeconomics June 3, 2020 2 / 50 Chapter 5: Theory on producer behaviors June 3, 2020 Microeconomics June 3, 2020 3 / 50 Content 1 Theory of production Production function Production with a variable input Production with two variable inputs 2 Theory of cost Short-run costs Long-run costs Economic cost, accounting cost, sunk cost Microeconomics June 3, 2020 4 / 50 Theory of production Production function A production function: Function showing the highest output that a firm can produce for every specified combination of inputs applies to a given technology. Given technology is a given state of knowledge about the various methods that might be used to transform inputs into outputs. As the technology becomes more advanced and the production function changes, a firm can obtain more output for a given set of inputs. Microeconomics June 3, 2020 5 / 50 Theory of production Figure: Production function Microeconomics June 3, 2020 6 / 50 Theory of production Production function Production function is a compact description of how inputs (capital K, L labor) are turned into output Q. Q = f(K,L) Microeconomics (1) June 3, 2020 7 / 50 Short-run versus Long-run Short-run production The short-run production is the production in which one input, labor, is variable, and the other, capital, is fixed Long-run production The long-run production is the production in which both labor and capital are variable. Microeconomics June 3, 2020 8 / 50