6. Costs

Comments · 135

• MI

  @mitocw · 1 year ago · pinned

  * View newer version of the course: <a href="https://ocw.mit.edu/14-01F23">https://ocw.mit.edu/14-01F23</a> *

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• AM

  @Amfkndinosaur · 5 years ago

  Such a passionate professor. It’s literally a privilege to have this for free at our own convenience. 💪🏼❤️

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• LE

  @legendofcha · 1 year ago

  The last two minutes of this lecture aged like fine wine.

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• GO

  @gorkajames6475 · 4 years ago

  <a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=1186">19:46</a> this is the key to this lecture folks.

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• ST

  @stevebargdill1 · 1 year ago

  I love how in Lecture 1 he said he wasn&apos;t going to use the board much &apos;cause he&apos;s got bad penmanship but man. Kills a whole stick of chalk every time. &nbsp;:)

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• DO

  @domsjuk · 5 years ago

  <a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=690">11:30</a> AVC should be 5*q.

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• CA

  @caratinawaiters2590 · 3 years ago

  I absolutely love how he explains the setup and &quot;what we are after with this lecture&quot;

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• RY

  @ryanhayes5475 · 5 years ago

  I have a B.S. in Econ, and watching these videos is like reliving the thrill of learning intermediate micro for the first time.

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• VA

  @VaishnaviWasalwar-e9n · 2 years ago

  <a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=16">00:16</a> Developing a cost curve for producer theory.<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=138">02:18</a> In short run, total costs = fixed costs + variable costs<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=410">06:50</a> Cost function consists of fixed and variable components<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=547">09:07</a> Understanding the relationship between costs and production output<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=809">13:29</a> Marginal cost is influenced by the productivity and wage of workers.<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=958">15:58</a> Considering wages relative to productivity<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=1181">19:41</a> Graphical representation of cost and production function<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=1290">21:30</a> Tangency of isoquant and iso cost determines optimal mix of capital and labor<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=1520">25:20</a> The marginal rate of technical substitution is key for optimizing inputs.<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=1647">27:27</a> Optimal amount of machines is half as many as workers due to equal productivity and cost minimization.<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=1935">32:15</a> Cost function is derived from production function and input prices.<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=2053">34:13</a> Discussing changes in input prices<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=2283">38:03</a> Higher wage rates lead to fewer workers and more machines<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=2392">39:52</a> Total cost has gone up to 70 from 50 due to higher input prices.<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=2601">43:21</a> Long run expansion path determines long run cost curve<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=2713">45:13</a> Long run costs are generally lower than short run costs due to optimizing over a longer period.<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=2939">48:59</a> Transition to building a larger battery plant for efficient production<br><a href="https://www.youtube.com/watch?v=TSYNHb6YBEE&amp;t=3040">50:40</a> Discussing Costs and Competition

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• MI

  @MichaelMok-yk9dc · 1 year ago (edited)

  C=rK+wL is generally true because it is a tautology, based on how we define C, r, K, w and L, it is logically impossible to be false. And the further Long-run Cost function is actually decided by how we assume the production function q(K, L) is and the value of w and r. As a teacher, not only do we need to tell students what it is, but more importantly, tell them why it is and the nature of it.

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• SE

  @seprisa19 · 4 years ago

  Amazing lecture by Prof. Michael Scott

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• XI

  @xingwei9346 · 4 years ago

  In Figure 6-1, the formula of AVC is not correct. It should be AVC=5q, not AVC=5/q.

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