Describe the equilibrium conditions in consumer theory (utility maximization) and in production (output maximization). How are they similar? Briefly talk about the duality between production and cost. (Don't forget to talk about law of diminishing MU, diminishing MRS, diminishing MPs and diminishing MRTS. Clearly define each concept with examples. Make sure to define budget and cost constraints. Indifference curves and isoquants. Graphically derive the equilibrium conditions. Make sure to talk about how output maximization and cost minimization lead to the same maximizing/minimizing input bundles. )
Describe the equilibrium conditions in consumer theory (utility maximization) and in production (output maximization). How are they similar? Briefly talk about the duality between production and cost. (Don't forget to talk about law of diminishing MU, diminishing MRS, diminishing MPs and diminishing MRTS. Clearly define each concept with examples. Make sure to define budget and cost constraints. Indifference curves and isoquants. Graphically derive the equilibrium conditions. Make sure to talk about how output maximization and cost minimization lead to the same maximizing/minimizing input bundles. )
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter6: Consumer Choice And Demand
Section: Chapter Questions
Problem 6QFR
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Describe the equilibrium conditions in consumer theory (utility maximization) and in production (output maximization). How are they similar? Briefly talk about the duality between production and cost. (Don't forget to talk about law of diminishing MU, diminishing MRS, diminishing MPs and diminishing MRTS. Clearly define each concept with examples. Make sure to define budget and cost constraints. Indifference curves and isoquants. Graphically derive the equilibrium conditions. Make sure to talk about how output maximization and cost minimization lead to the same maximizing/minimizing input bundles. )
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