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Topic: Production functions

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In the News (Wed 22 Nov 17)

  Production function - Wikipedia, the free encyclopedia
All points above the production function are unobtainable with current technology, all points below are technically feasible, and all points on the function show the maximum quantity of output obtainable at the specified levels of inputs.
Point B is the point of diminishing average returns, as shown by the declining slope of the average physical product curve (APP) beyond point Y. Point B is just tangent to the steepest ray from the origin hence the average physical product is at a maximum.
Homothetic functions are a special class of homogeneous function in which the marginal rate of technical substitution is constant along the function.
en.wikipedia.org /wiki/Production_function   (1651 words)

 Production, costs, and pricing - Open Encyclopedia   (Site not responding. Last check: 2007-10-21)
In microeconomics, production is the act of making things, in particular the act of making products that will be traded or sold commercially.
Production decisions concentrate on what goods to produce, how to produce them, the costs of producing them, and optimizing the mix of resource inputs used in their production.
This production information can then be combined with market information (like demand and marginal revenue) to determine the quantity of products to produce and the optimum price to charge.
open-encyclopedia.com /Production   (218 words)

 Egwald Economics - Production Functions: Cobb-Douglas Production Function
Production functions need to have certain properties, to ensure that we can solve the least-cost problem: Check any of the many textbooks.
If for given values of L,K, and M, the Hessian of the production function f is negative definite, then its isoquants at that point are concave to the origin.
If for each feasible amount of product, we compute the cost of producing the product using the cost minimizing combination of inputs, we obtain the cost function, from which the average cost and marginal cost functions can be obtained.
www.egwald.com /economics/productionfunctions.php   (1276 words)

 Production Function
There is one rule that seems to hold for all production functions, and because it always seems to hold, it is called a law.
Most products require many more than two inputs, but showing a production function with more than two inputs with graphs or tables is difficult.
In explaining the theory of the firm, economists conventionally assume that the production function is fixed and that the firm operates on the surface of the production function.
ingrimayne.saintjoe.edu /econ/TheFirm/ProductionFunct.html   (1167 words)

 CEF 1997: Production Functions as Turing Machines   (Site not responding. Last check: 2007-10-21)
In this paper production functions are modelled in terms of Turing machines or compositions of Turing machines.
The input tape and the output tape of the machine are seen as encodings of respectively the inputs of production and the output.
Here it is shown how, for example, research and development may be modelled as the producers' search for new production inputs (i.e., new encodings for the initial tape), new products (i.e., new encodings for the final tape), new technologies (i.e., new configurations for the Turing machines).
bucky.stanford.edu /cef97/abstracts/zambelli.html   (225 words)

 Economic Quarterly: Algebraic production functions and their uses b... @ HighBeam Research   (Site not responding. Last check: 2007-10-21)
Production functions apply at the level of the individual firm and the macro economy at large.
The notion of an algebraic production function is implicit in the earliest verbal statements of the operation of the law of diminishing returns in agriculture.
Production functions continued to prove their worth in the latter half of the 1890s when marginalists employed them to resolve the famous adding-up problem of product exhaustion.(10) At stake was nothing less than the logical consistency of the marginal productivity theory of distribution.
highbeam.com /library/doc0.asp?DOCID=1G1:19656437&...   (10849 words)

 The Production Function
Obviously, the hill-shape of the production function indicates that the more we use of the factors, the greater output is going to be (at least up to the some maximum, the "top" of the hill).
Assumption (A.5), the quasi-concavity of the production function
Production is divisible if it "permits any particular method of production, involving certain proportions between factors and products, to be repeated in exactly the same way on larger or on a smaller scale." (Lerner, 1944: p.143).
cepa.newschool.edu /het/essays/product/prodfunc.htm   (5601 words)

 Elasticity of Substitution
Thus, as Joan Robinson points out, what the assumption of diminishing marginal productivity "really states is that there is a limit to the extent to which one factor of production can be substituted for another, or, in other words, the elasticity of substitution between factors is not infinite" (J. Robinson, 1933: p.330).
A famous case is the well-known Cobb-Douglas production function introduced by Charles W. Cobb and Paul H. Douglas (1928), although anticipated by Knut Wicksell (1901: p.128, 1923) and, some have argued, J.H. von Thünen (1863).
A special class of production functions, known as Constant Elasticity of Substitution (CES) production functions, were introduced by Arrow, Chenery, Minhas and Solow (1961) (thus it is also known as the ACMS function).
cepa.newschool.edu /het/essays/product/elastic.htm   (2257 words)

 CONSTANT RETURNS TO SCALE PRODUCTION FUNCTIONS   (Site not responding. Last check: 2007-10-21)
It is perhaps not widely enough appreciated among economists that the concept of a production function for a firm is quite different from the concept of a production function for a plant.
This means that marginal labor productivity is the same in all the plants so the level of labor input is the same in all the plants.
This is achieved where marginal labor productivity is equal to average labor productivity and thus average labor productivity is a maximum.
www.sjsu.edu /faculty/watkins/scale.htm   (711 words)

 Geographical information systems and remote sensing in inland fisheries and aquaculture
Production functions are most frequently economic factors though they may also be physical factors and to a lesser extent social factors.
Consideration of those spatially variable production functions which cause variations in the efficiency of fish production from area to area demands that a number of general factors are reviewed.
Having now examined a large number of production functions in varying degrees of detail, the prospective fish producer or land holder will at least be conscious that the simple fact of having some accessible water nearby may not be good grounds to embark upon fish production.
www.fao.org /DOCREP/003/T0446E/T0446E02.htm   (8644 words)

 Egwald Economics - Production Functions: CES Production Function
While Cobb-Douglas production functions are great, because they are easy to estimate, the elasticity of substitution between factors is always equal to 1.
CES production functions permit you to vary the elasticity of substitution.
Since our CES production function has decreasing returns to scale, the average cost and marginal cost are increasing, and marginal cost is greater than average cost.
www.egwald.com /economics/cesproductionfunctions.php   (1242 words)

 Energy, Entropy, Economics, and Ecology
The functions are a network of nutrient pathways (a food web), the topology of which is determined by ecological strategies of the species, and is an essentially fixed evolutionary feature on the time scale of ecosystem processes.
Additionally, suitable economic and cultural forms of "entropy" presumably need to be added to the picture—but the biological systems within which economies function (or fail to be functional) fall in the arena of evolutionary ecology, and this is the domain of the entropy concept into which an economic entropy concept should be fitted.
Thus the economy is dependent for its maintenance, growth and development on the production of low entropy energy/matter (essergy) by the ecosphere and on the waste assimilation capacity of the ecosphere.
www.dieoff.com /page17.htm   (9313 words)

 Archived: GFI - CPRE-Finance Center Publication
Evidence regarding school resource allocation processes and production efficiency is used to evaluate the potential impacts of increased spending on education outcomes, how much funding might be required to meet various goals, and the extent to which school restructuring strategies might improve efficiency.
The purpose of this paper is to begin to develop a conceptual framework for examining productivity in higher education and to propose an explanation for why productivity, as seen by those who pay for higher education, has declined.
The author responds to a critique of the education production function formulation that was published in an earlier issue of Education Policy Analysis Archives by Steven Hodas.
www.ed.gov /offices/OERI/GFI/gficpre1.html   (18659 words)

 Education Policy Analysis Archives: Vol. 1 No. 12 Hodas "Problems with Production Functions
It follows that there is no role for centralized authority in the improvement of productivity aside from the setting of targets, the dissemination of ideas that might be tried by teachers, and perhaps efforts to make it easier for teachers to try ideas out.
Perhaps this is rooted in his belief that, absent a tractable production-function, "there is no role for 'centralized authority' in the improvement of productivity aside from the setting of targets, the dissemination of ideas that might be tried by teachers, and perhaps efforts to make it easier for teachers to try ideas out" (emphasis added).
It is a managers' tool, designed for management functions; it has nothing to do with teaching and learning but with the management of teaching and learning This hierarchical factory/industrial model of organization is something I had thought we were moving away from.
olam.ed.asu.edu /epaa/v1n12.html   (2866 words)

 Learn more about Anthropological theories of value in the online encyclopedia.   (Site not responding. Last check: 2007-10-21)
Starting with Marxist definitions of consumption and production, he introduces Mauss’ idea of "objects that are not consumed" and constructs a list of things that are neither consumption nor production.
Graeber’s list includes those human activities that are not consumption, in the narrow sense of simply purchasing something, and are not production, in the sense of creating or modifying something intended for sale or exchange.
Also Gary Becker's household production functions and similar topics note that people often purchase goods and then combine them with time to produce something that has meaning or practicality to them (a.k.a.
www.onlineencyclopedia.org /a/an/anthropological_theories_of_value.html   (508 words)

 Nonhomogeneous Production Functions and Applications to Telecommunications   (Site not responding. Last check: 2007-10-21)
Abstract: A form of nonhomogeneous production function is utilized to compute marginal productivities, various elasticities, optimum input ratios, and the like, for different levels of inputs and outputs.
This form of production function can be fitted by simple regression and allows variable returns to scale and variable elasticities of substitution.
The first study includes estimation of certain cost elasticities for the manufacture of sealed contacts by the Western Electric Co. The second deals with an aggregative production function for the Bell System, where it is found that the empirical evidence does not support the assertion that the Bell System is over-capitalized.
www.rje.org /abstracts/abstracts/1972/Autumn_1972._pp._531_543.html   (145 words)

 Empirical support for aggregate Cobb-Douglas production functions?   (Site not responding. Last check: 2007-10-21)
Consider the Cobb-Douglas production function: Y = A * (K^alpha) * [ L^(1 - alpha) ] where Y, A, K, and L are all functions of time, "^" denotes exponentiation, and "*" denotes multiplication.
The Cobb-Douglas production function can also be expressed in per capita terms as: y = A * (k^alpha) where y is income per capita and k is capital per worker.
I have finally grasped the theoretical attractiveness of this particular production function: it satisfies the constraint MPL = w.
www.seriousliving.net /new-3580872-1115.html   (699 words)

 Amazon.ca: Books: Aggregation: Aggregate Production Functions and Related Topics   (Site not responding. Last check: 2007-10-21)
The question of the existence of aggregate production functions is not only part of the foundation of macroeconomic theory and policy but also played a central role in the "Cambridge vs. Cambridge" debate, which challenged long-held assumptions about the foundations of neoclassical microeconomics.
In this third collection of his essays Franklin M. Fisher settles the question of the conditions for the existence of aggregate production functions.
He examines the conditions for approximate aggregation and, through simulation experiments, considers why aggregate production functions appear to work in practice.
www.amazon.ca /exec/obidos/ASIN/026206152X   (305 words)

 [No title]
Given the knowledge types as we defined them above and the mathematical rules by which they should be updated from agent to agent, here are the production functions that result.
Note that every production function for a given agent is run exactly once: type 4 (private knowledge) in the very beginning, type 3 (public knowledge) at the proper moment in the sequence, when all the previous agents have made their decisions, and type 5 (the agent's decision) after type 3 is calculated.
Type 0: ID: no production function, the ID needs to be set for every agent beforehand.
www.si.umich.edu /IGD/tutorials/infocascades/t6s4.htm   (610 words)

 BERA: Issue 2 Automotive Industry: Global Automotive Industry
This paper examines the global reorganization of the automobile industry and the direction of its global strategies; The role of economies of scale in the global reorganization and the production sytems of various models and quantities; and the direction of global structural change in the automobile component industry.
The EU's largest automotive producer is Germany estimated at 30 % of EU's total production, followed by France at 19 % and Spain at 17 %, and the United Kingdom at 10 %.
However, with the continued strong production growth of the automotive industry in Asia, analysts suggest that the Asia/Pacific region will be a driver of industry growth worldwide.
www.lcweb.loc.gov /rr/business/BERA/issue2/industry.html   (3159 words)

 [No title]
"Productivity and R&D at the Firm Level," (with J. Mairesse) in Z. Griliches, ed, R&D, Patents,and Productivity, 1984, 339-374, Chicago: University of Chicago Press.
"Productivity and Research 1973," in Conference on an Agenda for Economic Research on Productivity, (sponsored by the National Commission on Productivity, Washington, D.C., April 1973), Washington: U.S. Government Printing Office, 1974, 0-522-283, pp 26-30.
"The CPI Debate and the Measurement of Productivity," CSLS News, 2 (Sept. 97): 18-20.
econweb.fas.harvard.edu /faculty/zgrilich/Vita2.htm   (5735 words)

 HKUST Institutional Repository: Item 1783.1/1154
We show that if factor shares and the growth rates of wages and of the profit rate are constant over time, then fitting a Cobb-Douglas production function with an exponential time trend amounts to estimating an accounting identity.
The marginal productivity condition likewise follows directly from the accounting identity.
Monte Carlo simulations explore the degree to which factor shares and the growth rates of wages and of the profit rate have to vary for the estimation of the “Cobb-Douglas production function” (accounting identity) to no longer yield an appropriate approximation of the economy.
hdl.handle.net /1783.1/1154   (133 words)

 Additive Nonhomogeneous Production Functions in Telecommunications   (Site not responding. Last check: 2007-10-21)
Abstract: An additive form of a nonhomogeneous production function is suggested in this paper as a tool to study economic trends in production processes.
The marginal products are explicitly stated as a function of the input ratios.
Marginal products and elasticities have been computed and compared with the same series generated by a multiplicative nonhomogeneous form recently proposed by H.D. Vinod.
www.rje.org /abstracts/abstracts/1973/Autumn_1973._pp._499_514.html   (161 words)

 Production Functions Look at Unobservables
Many economists currently take a somewhat jaundiced view of the estimation of aggregate production functions.
Three problems seem particularly troublesome: the "unobservables' problem, especially with regard to input utilization; the aggregation problem; and the simultaneous equations problem.
The other question is one with which most researchers on productivity have struggled: how to correct productivity for cyclical variations in the utilization of inputs.
www.cepr.org /pubs/bulletin/dps/dp34.htm   (222 words)

 EconPapers: Comparing neural networks and efficiency techniques in non-linear production functions   (Site not responding. Last check: 2007-10-21)
Abstract: Non-linear production functions are common in economic theory and in real life, especially in cases with increasing and diminishing returns to scale but there are also contexts where an increase in one input implies a decrease in one output.
The aim of this paper is to test how non-linearity affect estimations of technical efficiency obtained by ordinary and corrected least squares (OLS, COLS), data envelopment analysis with constant and variables returns to scale (DEAcrs, DEAvrs), stochastic frontier analysis (SFA) and by multilayer perceptron neural networks with backpropagation (MLP).
To do this we will construct a very simple non-linear one input-one output production function and we will obtain different synthetic data with 50, 100, 200 and 300 decision-making units (DMUs).
netec.wustl.edu /WoPEc/data/Papers/ucmdoctra0202.html   (320 words)

 Energy Citations Database (ECD) - Energy and Energy-Related Bibliographic Citations
Energy Citations Database (ECD) Document #6051274 - Conventional production functions versus energy-term production functions: energy used for crop production in Midwest agriculture
Availability information may be found in the Availability, Publisher, Research Organization, Resource Relation and/or Author (affiliation information) fields and/or via the "Full-text Availability" link.
Conventional production functions versus energy-term production functions: energy used for crop production in Midwest agriculture
www.osti.gov /energycitations/product.biblio.jsp?osti_id=6051274   (112 words)

 Production Functions: The Search for Identification
Some aspects of the econometric estimation of production functions are discussed, focussing primarily on the issue of simultaneity and reviewing the stream of criticisms of Douglas' work and the response to it.
We describe the need for better data, especially on product prices at the individual observation level and on relevant cost and demand shifters, and for better behavioral theories which would encompass the large amount of heterogeneity observed at the micro level.
"Production Functions and Efficiency Analysis of the Siberian Forest Industry: An Enterprise Survey 1989 and 1992," Working Papers ir99060, International Institute for Applied Systems Analysis.
ideas.repec.org /p/nbr/nberwo/5067.html   (2156 words)

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