Im trying to get through some economics questions so im prepared for
my test. The questions posted are the ones I have been having some
trouble with. Please draw any needed graphs electronically and post
them to my ftp site: ftp://help.linked2.net username: help@linked2net
password:help.

1. Define Isoquant
2. What is the slope of an Isocost? Prove it.
3. How can cost minimization be necessary, but not sufficient for
profit maximization?
4. Define marginal. I.e., marginal cost, marginal revenue, etc...
5. Define economics

isoquant: "the set of all pairs... of inputs that yield the [same]
output...," ("Combinations of inputs that yield the same output:
isoquants" http://www.chass.utoronto.ca/~osborne/2x3/tutorial/ISOQUANT.HTM).
 Isoquants are also known as equal-product curves (page 137).

The slope of an isocost is equal to the ratio of the input on the
x-axis to the price of the input on the y-axis.  This is proven
graphically in the file Economics Questions that I will upload to your
FTP site once you provide me with a valid username and password.

Profit is determined by subtracting costs from revenues.  Therefore,
profit can only be maximized if not only costs are minimized, but
revenues are maximized.

Marginal: The additional amount of something associated with 1 extra
unit, which, depending upon whether we are talking about cost,
revenue, or utility, may be produced, sold, or consumed.

"Economics is a study of how societies use scarce resources to produce
viable commodities and distribute them among different people," (page
3)

Sincerely,

Wonko

Reference: Economics, 14th edition, Samuelson & Nordhaus, McGraw-Hill Inc., 1992

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Clarification of Answer by wonko-ga on 15 May 2004 18:37 PDT

I managed to gain access by adding a period after linked2 in the
username.  Now the server reports that the disk is full.  Please check
and advise me what to do.

Thanks!

Wonko

3)If you fail to minimize your costs, your unit cost may exceed all
your competitors retail unit price. Most methods of minimizing cost,
have an indirect adverse effect on quality. If quality falls, return
customers will be rare, and advertising costs will offset savings in
unit costs.  We need to consider the indirect effects of each cost
minimizing strategy we consider. Typically, unit cost is lowest when
production is near the capacity of the corporate infrastructure, so
falling sales is typically a disaster.   Neil