2.4 — Costs of Production — Class Content

Meeting Date

Monday, March 20, 2023

Upcoming Assignment

Problem Set 3 (on classes 2.1-2.3) is due by 11:59 PM Wednesday March 22 on Blackboard Assignments.

Overview

Today we cover costs before we put them together next class with revenues to solve the firm’s (first stage) profit maximization problem. While it seems we are adding quite a bit, and learning some new math problems with calculating costs, we will practice it more next class, when put together with revenues.

Readings

• Ch. 7 in Goolsbee, Levitt, and Syverson, 2019

Appendix

See the online appendix for today’s content:

• From Total Product to Total Cost: Output Expansion Paths
• Marginal Cost and Variable Cost
• The Relationship Between Returns to Scale and Costs
• Cobb-Douglas Cost Functions

Assignments

Problem Set 3 Due Wednesday March 22

Problem Set 3 (on classes 2.1-2.3) is due by 11:59 PM Wednesday March 22 on Blackboard Assignments.

Slides

Below, you can find the slides in two formats. Clicking the image will bring you to the html version of the slides in a new tab. The lower button will allow you to download a PDF version of the slides.

Tip

You can type h to see a special list of viewing options, and type o for an outline view of all the slides.

I suggest printing the slides beforehand and using them to take additional notes in class (not everything is in the slides)!

Download as PDF