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ECON 201
Corey Van De Waal

that definedphysicalto be torelationshipinputsaof as y TechnologytobedefinedTechnologyquantities ciency parameter returns to scaleproduct oduced using all possible combinations singlephysicala thess a production function in the following Lecture 9 for CapitalCapitalrelatesthephysicalquantitiesofinputstophysicalrelates function LabourLabourfunctionL K land raw materials effi fproduction a YYOutputproductionfunctionproduction define WedefineaproductionfunctionforasingleproductyasarelationshipthatWeThisThismannermannershows the maximum output that can be prof inputs on the basis of a given technologyquantities of outputWe will find it convenient to exprePRODUCTIONPRODUCTION1The Production Function for a Single Producta on iA1uctdtechnology tells us that produce Lof e proourhcan b tfalstateoftechnologystatefirmcanproduceafirmunits of labour an an on oi1tthigivengivenn fier a ethfunction is the idea that it represents the maximummaximum output of LdfiiifhdidoutputoutputThe function TPefficientefficientThe key concept in the with Lfor s otl K so we can treat capital as a L Knpuifer yth orelationshipsll es adulnci productiont ath ite unititthtildllthitththlbitinvestigate will To simplify our analysis we will assume that land and raw materials are absorbed into the input we call capitaBased on these simplifying assumptions we will use the following general form of the production functionIn our analysis we will usually assume that technology is constantThat is wewillinvestigateproductionrelationshipsforawecompos
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