Errors in the Textbook
Perman, Ma, Common, Maddison and McGilvray
NATURAL RESOURCE AND ENVIRONMENTAL ECONOMICS
Fourth Edition
Chapter 4
p. 105 Figure 4.9: The vertical axis should be labeled “K”.
Brought to authors' attention by Paul Burke, Research Fellow, Arndt-Corden Department of Economics, Australian National University
p. 105 (Several places). The slope of the isocost line should be Psub{L}/Psub{K}
Brought to authors' attention by Paul Burke, Research Fellow, Arndt-Corden Department of Economics, Australian National University
General matter in Chapter 4
Readers may have noticed that the text of the chapter may be criticised in regard to its treatment of signs. Slopes of isocost lines and indifference curves (as shown, for example, in Figures 4.8 and 4.9) are negative, but the MRT is conventionally given as positive. Both sides of the equation preceding 4.9 are (when the rhs is corrected as given in the errata statement above)!) equal to minus dK/dL. All these derivations are laid out mathematically correctly in the appendix to this chapter, available from the website.