Chapter 4: Production Economics
This video complements Section 4.1 in Chapter 4 of Economic Essentials for Business, Management and Engineering. It provides a discussion of production economics, including a graphical analysis of total, average and marginal production functions, and isoquants. In addition, general production functions used in economics are specified, and how technological change affects isoquants depending on whether technology improves labor or capital productivity, or both. The marginal rate of technical substitution is derived and discussed, as is the notion of duality and shadow prices.