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Production Function:

 

What is Production Function?

 

Production of goods requires resources or inputs. These inputs are called factors of production named as land, labor, capital and organization. Continue reading.

 

Short Period Analysis of Production:

 

The short run is a period of time in which only one input (say labor) is allowed to vary while other inputs land and capital are held fixed. In the short run, therefore, production can be increased with one variable factor and other factors remaining constant. Continue reading.

 

Long Run Production With Variable Inputs:

 

The long run is the lengthy period of time during with all inputs can be varied. There are no fixed output in the long run. All factors of production are variable inputs. Continue reading.

 

Isoquants:

 

The word 'iso' is of Greek origin and means equal or same and 'quant' means quantity. An isoquant may be defined as a curve showing all the various combinations of two factors that can produce a given level of output. Continue reading.

 

Properties of Isoquants:

 

The main properties of the isoquants are similar to those of indifference curves. These properties are now discussed in brief. Continue reading.

 

Isocost Lines:

 

A firm can produce a given level of output using efficiently different combinations of two inputs. For choosing efficient combination of the inputs, the producer selects that combination of factors which has the lower cost of production. Continue reading.

 

Marginal Rate of Technical Substitution:

 

Prof. R.G.D. Alien and J.R. Hicks introduced the concept of MRS (marginal rate of substitution) in the theory of demand. The similar concept is used in the explanation of producers equilibrium and is named as marginal rate of technical substitution (MRTS). Continue reading.

 

Optimum Factor Combination:

 

In the long run, all factors of production can be varied. The profit maximization firm will choose the least cost combination of factors to produce at any given level of output. The least cost combination or the optimum factor combination refers to the combination of factors with which a firm can produce a specific quantity of output at the lowest possible cost. Continue reading.

 

 

 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance
History of Money

 

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