# ECO200Y1 : summary

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18 Apr 2011
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## Document Summary

Definitions: very short run, short run: q, long run: q, very long run: There are various levels of k and l to produce a specific level of output. Isoquants: hold q constant and see what combinations of k and l are required. Q2 represents a higher output: negatively sloped if k decreases, l must increase to keep q constant. slope. L: convex because of the law of diminishing returns. Mrts decreases as l increases and k decreases. ridge line q2 q1. L: mrts constant, mrts = 0. q2 q1. 1 = q and: constant return to scale: (output doubled). Increasing return to scale: decreasing return to scale: (output more than doubled). (output less than doubled). Math examples of long run production functions: constant return to scale: q. It"s impossible for a production function which exhibits increasing returns to scale to also adhere to the law of diminishing returns" . Do you agree: no, it is possible.