After studying this chapter, you should be able to understand:
- The supply of a good is determined by, to a large extent, the cost of production of the good.
- Production is a process, where inputs are converted into an output.
- The production function is a technological relationship between the physical inputs and outputs in a particular time, given the technology.
- The law of variable proportions occurs in the short run where to increase production only one of the factors of production is increased while the others are kept fixed.
- The law of returns to scale occurs in the long run where to increase production all the factors of production are increased.
- An isoquant depicts the various combinations of two factors of ...