Presented by:

Cruz, Charmaine M.
Dawis, Jenna Mae O.
Vizarra, Leslie Joy P.
BS Economics 3-2
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-When you get more y (linear term)
you always get your utility and always
Increases by at a constant rate as you
get money.
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The parameters on quadratic and
cubic production functions are
quite common, i.e., e 0 and c 0
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-The marginal revenue productivity theory
states that a profit maximizing firm will hire
workers up to the point where the marginal
revenue product is equal to the wage rate.
-A concave VMP (MRP) curve is possible only with the cubic function in
perfect competition.
-Even a cubic production function with negative coefficient on cubic term
must generate convex MRP curve in the efficient production stage where
marginal product approaches zero
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Three dimensional with utility or output
measured along the vertical axis
To get the XY projection in the utility
function, simply take a given level of U=0 and solve for Y as a
function of X.
It illustrates several economic
concepts, such as scarcity of
resources, opportunity cost
productive efficiency, allocative
efficiency, and economies of scale.
 states that demand creates its
own supply; changes in aggregate
demand cause changes in real GDP
and employment.