Part III
Production and Utility Functions

10 Basics: Homogeneous and homothetic functions
 10.1 General information on the notation of functions
 10.2 Homogeneous functions
 10.3 Homogeneous functions of two variables
 10.4 Important properties of homogeneous functions: The Euler theorem and the absence of profit for companies with linear economies of scale
 10.5 Homothetic functions
11 Substitutionality of production factors
12 CES production function
 12.1 Costs
13 Producer surplus and profit
14 Economies of scale
15 Elasticities
 15.1 Elasticity of any function
 15.2 Elasticities: Characteristics of the graphic illustration of price elasticity
 15.3 Elasticities: short and long term
 15.4 Elasticities of substitution
 15.5 Network Externalities: Band wagon- and snob- effect

(c) by Christian Bauer
Prof. Dr. Christian Bauer
Chair of monetary economics
Trier University
D-54296 Trier
Tel.: +49 (0)651/201-2743