What is a production function? Write an equation for a typical production function, and explain what each of the terms represents
A production function is a mathematical representation of the relationship between the quantity of inputs used in production and the quantity of output produced using these inputs. A typical production function could be written as Y = A F(L, K, H, N), where Y denotes the quantity of output, L the quantity of labor, K the quantity of physical capital, H the quantity of human capital, N the quantity of natural resources, and A is a variable that reflects the available production technology.
You might also like to view...
The difference between exports and imports of goods is the
A) balance of trade. B) balance of payments. C) balance of accounts. D) balance of paying.
The law of diminishing return does not apply to a firm in the long run because in this phase:
a. all the factors of production are fixed. b. there are no fixed factors of production. c. there are some fixed and some variable factors of production. d. the producer is required to produce a fixed level of output. e. the producer can change the level of output only by changing the variable factors, fixed factors remaining unchanged.
The article "Samsung Stung by Apple Moves" related to the price cuts for the iPhone indicates that
A. The percentage change in the quantity demanded for the substitute cell phones was increasing less than the percentage change in the price. B. The demand for the iPhone was inelastic. C. The cross-price elasticity for iPhones and other cell phones produced by Samsung was negative. D. Apple lowered the price for the iPhone because the cross-price elasticity between it and the other competitors was positive.
From 1991 until 2001, the United States was in a period of
A) expansion. B) recession. C) business cycle troughs. D) business cycle peaks.