Managerial Economics-Production and cost Theory

(1) Explain ways of measuring the productivity of inputs and the role of the manager in the production process.

(2) Calculate input demand and the cost-minimizing com- bination of inputs and use isoquant analysis to illustrate optimal input substitution.

(3) Calculate a cost function from a production function.

(4) Explain how economic costs differ from accounting costs. (5) Explain the difference between and the economic re-

levance of fixed costs, sunk costs, variable costs, and marginal costs.

(6) Calculate average and marginal costs from algebraic or tabular cost data and illustrate the relationship between average and marginal costs.

 

(7) Distinguish between short-run and long-run production decisions and illustrate their impact on costs and eco- nomies of scale.

(8) Conclude whether a multiple-output production process exhibits economies of scope or cost complementarities and explain their significance for managerial decisions.