Post on 26-Nov-2014
30 Oktober 2007
Saran dan Kritik Kalo ada pertanyaan yang aneh gak usah dijawab sekalian soalnya
bikin bingung. (terlalu baik kalo ngejawab…jd pertanyaan nggak penting itu tetep dijawab dan bikin agak bingung).
Slidenya pake bahasa indonesia ajah… Perbanyak contoh soal dan pembahasannya (memberikan contoh
soal UTS dan UAS)…mahasiswa mengerjakan terlebih dahulu soal-soalnya….
Ada hiburannya… musik… (humornya ditambah supaya nggak ngantuk)…
Terlalu cepet ngejelasinnya (kak lebih pelan-pelan ngejelasinnya yah, saya ngertinya lama..hehe)
Kakak jangan suka bingung sendiri ya kak…(kebanyakan yang dipikirin…tidak perlu memikirkan asumsi yang merestriksi kakak berstatement…)…jawabanya tergantung mulu…
Lebih santai tetapi serius…( jangan terlalu serius). Jangan terlalu kaku…
Jangan terlalu lama… efisiensi waktu Intonasi nadanya diperjelas… Belajar dari hal-hal yang belum dimengerti Lebih sistematis… Ada sesi pertanyaan ketika asistensi akan berakhir
Cost of production
Measuring Cost:Which Costs Matter?
Accounting Cost Actual expenses plus depreciation charges for capital equipment
Economic Cost Cost to a firm of utilizing economic resources in production, including opportunity costOpportunity cost. Cost associated with opportunities that are
foregone when a firm’s resources are not put to their highest-value use.
Economic Cost vs. Accounting Cost
Costs as Opportunity Costs A firm’s cost of production includes all
the opportunity costs of making its output of goods and services.
Explicit and Implicit Costs A firm’s cost of production include explicit
costs and implicit costs. Explicit costs are input costs that require a
direct outlay of money by the firm. Implicit costs are input costs that do not
require an outlay of money by the firm.
Economic Profit versus Accounting Profit
Economists measure a firm’s economic profit as total revenue minus total cost, including both explicit and implicit costs.
Accountants measure the accounting profit as the firm’s total revenue minus only the firm’s explicit costs.
When total revenue exceeds both explicit and implicit costs, the firm earns economic profit. Economic profit is smaller than accounting
profit.
Economic versus Accountants
Revenue
Totalopportunitycosts
How an EconomistViews a Firm
How an AccountantViews a Firm
Revenue
Economicprofit
Implicitcosts
Explicitcosts
Explicitcosts
Accountingprofit
The Short Run versus the Long Run
Short-run: Period of time in which quantities of one or
more production factors cannot be changed.
These inputs are called fixed inputs.
Long-run Amount of time needed to make all
production inputs variable.
Isoquants
Assumptions Food producer has two inputs
Labor (L) & Capital (K)
Isoquants Curves showing all possible
combinations of inputs that yield the same output
Isoquants
Observations:1) For any level of K, output increases with more L.2) For any level of L, output increases with more K.3) Various combinations of inputs
produce the same output.
Production Function for Food
1 20 40 55 65 752 40 60 75 85 903 55 75 90 100 1054 65 85 100 110 1155 75 90 105 115 120
Capital Input 1 2 3 4 5
Labor Input
Production with Two Variable Inputs (L,K)
Labor per year
1
2
3
4
1 2 3 4 5
5
Q1 = 55
The isoquants are derivedfrom the production
function for output ofof 55, 75, and 90.A
D
B
Q2 = 75Q3 = 90
C
ECapitalper year The Isoquant Map
Isoquants
The isoquants emphasize how different input combinations can be used to produce the same output.
This information allows the producer to respond efficiently to changes in the markets for inputs.
Input Flexibility
The Isocost Line C = wL + rK W: wage (price of labor) r = Depreciation Rate + Interest Rate.
(user cost or price of capital) Isocost: A line showing all combinations
of L & K that can be purchased for the same cost
The Cost Minimizing Input Choice
Cost in the Long Run
Rewriting C as linear: K = C/r - (w/r)L Slope of the isocost:
is the ratio of the wage rate to rental cost of capital.
This shows the rate at which capital can be substituted for labor with no change in cost.
rwLK
The Isocost Line
Choosing Inputs
We will address how to minimize cost for a given level of output. We will do so by combining isocosts with
isoquants
Producing a GivenOutput at Minimum Cost
Labor per year
Capitalper
year
Isocost C2 shows quantity Q1 can be produced withcombination K2L2 or K3L3.However, both of these
are higher cost combinationsthan K1L1.
Q1
Q1 is an isoquantfor output Q1.
Isocost curve C0 showsall combinations of K and Lthat can produce Q1 at this
cost level.
C0 C1 C2
CO C1 C2 arethree
isocost linesA
K1
L1
K3
L3
K2
L2
Input Substitution When an Input Price Change
C2
This yields a new combinationof K and L to produce Q1.
Combination B is used in placeof combination A.
The new combination represents the higher cost of labor relativeto capital and therefore capital
is substituted for labor.
K2
L2
B
C1
K1
L1
A
Q1
If the price of laborchanges, the isocost curvebecomes steeper due to
the change in the slope -(w/L).
Labor per year
Capitalper
year
Cost in the Long Run
Isoquants and Isocosts and the Production Function
KL
MPMP- MRTS
LK
rw
LK
lineisocost of Slope
rw
MPMP
K
L and
Cost in the Long Run
The minimum cost combination can then be written as:
Minimum cost for a given output will occur when each dollar of input added to the production process will add an equivalent amount of output.
rwKL MPMP
Cost minimization with Varying Output Levels A firm’s expansion path shows the
minimum cost combinations of labor and capital at each level of output.
Cost in the Long Run
A Firm’s Expansion Path
Labor per year
Capitalper
year
Expansion Path
The expansion path illustratesthe least-cost combinations oflabor and capital that can be used to produce each level of
output in the long-run.
25
50
75
100
150
10050 150
300
200
A
$2000Isocost Line
200 UnitIsoquant
B
$3000 Isocost Line
300 Unit Isoquant
C
Long-RunExpansion Path
The long-run expansionpath is drawn as before..
The Inflexibility ofShort-Run Production
Labor per year
Capitalper
year
L2
Q2
K2
D
C
F
E
Q1
A
BL1
K1
L3
PShort-RunExpansion Path
End of todayThx…