Iso-cost lines Slopes =-W,/W2- c≡W1X1+W2X2 cW1X1+W2×2 c'< C
Iso-cost Lines c’ w1x1+w2x2 c” w1x1+w2x2 c’ < c” x1 x2 Slopes = -w1 /w2
The y'-Output Unit Isoquant All input bundles yielding y'units of output. Which is the cheapest? f(x12x2)≡y
The y’-Output Unit Isoquant x1 x2 All input bundles yielding y’ units of output. Which is the cheapest? f(x1 ,x2 ) y’
The Cost-Minimization problem All input bundles yielding y'units of output. Which is the cheapest? f(x1x2)≡y
The Cost-Minimization Problem x1 x2 All input bundles yielding y’ units of output. Which is the cheapest? f(x1 ,x2 ) y’
The Cost-Minimization problem All input bundles yielding y'units of output. Which is the cheapest? f(x12x2)≡y X1
The Cost-Minimization Problem x1 x2 All input bundles yielding y’ units of output. Which is the cheapest? f(x1 ,x2 ) y’ x1 * x2 *
The Cost-Minimization problem At an interior cost-min input bundle: 2t(a)f(x1,X2)=y f(x12x2)≡y X1
The Cost-Minimization Problem x1 x2 f(x1 ,x2 ) y’ x1 * x2 * At an interior cost-min input bundle: (a) f(x ,x ) y * * 1 2 =