D-MacroEcon-Ch26f-Production_Function

Production Function

Defintion

Production function demonstrates the relationship between the quantity of input used in production and the quantity of output from production

$$Y=AF(L,K,H,N)$$

• $Y$: output
• $A$: reflects the current production technology
• $F()$: A function shows how inputs are combined to produce output
• $L$: labor
• $K$: physical capital
• $H$: human capital
• $N$: natural resource

Constant Returns to Scale

Introduction

這是一些 production function 共有的一個性質：把所有投入都乘以 $x$ 倍，產出也剛好變成 $x$ 倍

$$xY=AF(xL,xK,xH,xN)$$

Productivity per Labor

由此性質可以推導出

$$Y/L=AF(1,K/L,H/L,N/L)$$