Cardinalist

In: Business and Management

Submitted By odunayo
Words 149960
Pages 600
HAL R. VARIAN

1

NORTON

To my parents

Copyright @ 1992, 1984, 1978 by W. W. Norton & Company, Inc.

All rights reserved
Printed in the United States of America

THIRD EDITION
Library o Congress Cataloging-in-Publication Data f Varian, Hal R.
Mlcroeconon~lc
analysis / Hal R. Varian. -- 3rd ed.
p. an
Includes blbllographlcal references and index.
1. Mlcroeconomlcs.
1. Title.
HB172.V35 1992
338.5--dc20

ISBN 0-393-95735-7
W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, N.Y. 10110
W. W. Norton & Company, Ltd., 10 Coptic Street, London WClA 1PU

CONTENTS

PREFACE

1 Technology
Measurement of inputs and outputs 1 Specification of technology 2
Example: Input requzrement set Example: Isoquant Example: Shortrun productzon posszbzlztzes set Example: Pt-oductzon functzon Example: Transformatzon functzon Example: Cobb-Douglas technology Example: Leontzef technology Activity analysis 5 Monotonic technologies
6 Convex technologies 7 Regular technologies 9 Parametric representations of technology 10 The technical rate of substitution 11
Example: T R S for a Cobb-Douglas technology The elasticity of substitution 13
Example: The elastzczty of substztutzon for the Cobb-Douglas productzon functzon Returns to scale 14
Example: Returns to scale and the Cobb-Douglas technology Homogeneous and homothetic technologies 17
Example: The CES productzon functzon Exercises 21

2 Profit Maximization .
Profit maximization 25 Difficulties 28
Example: The profit functzon for Cobb-Douglas technology Properties of demand and supply functions
31 Comparative statics using the first-order conditions 32 Comparative statics using algebra 35 Recoverability 36 Exercises 39

VI CONTENTS

3 Profit Function
Properties of the profit function 40
Example: The eflects of price stabilization Supply and demand functions from the profit function…...

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