Tag Info

In microeconomics : is this the contradiction in the atomicity of firms ?

A price-taking firm takes prices as given, but that does not mean that the firm cannot influence prices; it just means that the firm ignores its own impact on prices. Now the question is how sensible ...
• 13.5k

Aggregation of the closure property of a production set

Doing this more abstractly, let $Y_j\subseteq\mathbb{R}^n$ be a production set for $j=1,\ldots,J$ and let $$Y=Y_1+Y_2+\cdots+Y_J=\{y_1+y_2+\cdots+y_J|y_j\in Y_j, j=1,\ldots,J\}$$ be the aggregate ...
• 13.5k
Accepted

In microeconomics : is this the contradiction in the atomicity of firms ?

This does sound a lot like the “contradiction” that Keen tries to derive. The key to resolving it is to remember that firms are small relative to the market, so $$\frac{\mathrm dQ}{\mathrm dq_i} = 0.$$...
Accepted

Aggregate production function and returns to scale

I am assuming that you are interested in finding the aggregate production function when you have two plants and they use same inputs. So if you have $k$ units of capital and $l$ units of labor in ...
• 9,411
Accepted

GDP with Intermediate Production

You’re looking for gross output; GDP is final output. Per the BEA: Economy-wide, real gross output—principally a measure of an industry's sales or receipts, which includes sales to final users in ...
• 6,384

Aggregation of the closure property of a production set

For a fully overview on the conditions for the sum of closed sets to be closed, see this note of Kim Border Recession cones I'll be working with subsets of $\mathbb{R}^n$. Let's start with some ...
• 12.5k
Accepted

1 vote
Accepted

Complementarity in CES Production Function

Total investment in terms of how much capital is augmented, is always $I = I_{b} + I_{h}$. $(I_{b}^K + I_{h}^K)^{\frac{1}{K}}$ is equal to the amount of the intermediate good $Y$ that we need to ...
• 33.9k
1 vote

Will SRAS curve definitely shift if LRAS curve shifts?

Short answer: Yes, the SRAS curve will shift after the LRAS shifts to return the short-run equilibrium (SRAS/AD) back in line with the long-run equilibrium (LRAS/AD). The reason the SRAS curve doesn't ...
• 178
1 vote

Will SRAS curve definitely shift if LRAS curve shifts?

The SRAS also shifts. SRAS is normally used in models where the supply side does not adjust immediately to the new conditions in the market, i.e. models with nominal rigidities. Examples are: sticky ...
• 85

Only top scored, non community-wiki answers of a minimum length are eligible