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Here Is a Copy of Your Friend's Class Notes on the Nine

Question 109

Essay

Here is a copy of your friend's class notes on the nine basic assumptions of producer behavior:
1. The firm produces two goods.
2. The firm has already decided which product to produce.
3. The firm's goal is to produce as much output as possible at minimum cost.
4. The firm uses only capital and labor inputs in making its product.
5. In the short run and long run, both labor and capital inputs are fixed.
6. In general, the more inputs a firm uses, the more output it produces.
7. There are constant marginal returns to labor and capital.
8. As the firm buys more labor and capital inputs, the increased demand raises input prices.
9. The firm's budget constraint is negatively sloped.
Because your friend was half-asleep during class, they may have errors in their notes. Correct the errors in their notes where necessary.

Correct Answer:

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1. The firm produces only one good.
2. N...

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