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ERIC Number: EJ1056570
Record Type: Journal
Publication Date: 2011
Pages: 6
Abstractor: As Provided
Reference Count: 23
ISBN: N/A
ISSN: ISSN-1942-2504
The Historical Role of the Production Function in Economics and Business
Gordon, David; Vaughan, Richard
American Journal of Business Education, v4 n4 p25-30 2011
The production function explains a basic technological relationship between scarce resources, or inputs, and output. This paper offers a brief overview of the historical significance and operational role of the production function in business and economics. The origin and development of this function over time is initially explored. Several various production functions that have played an important historical role in economics are explained. These consist of some well known functions, such as the Cobb-Douglas, Constant Elasticity of Substitution (CES), and Generalized and Leontief production functions. This paper also covers some relatively newer production functions, such as the Arrow, Chenery, Minhas, and Solow (ACMS) functions, the transcendental logarithmic (translog), and other flexible forms of the production function. Several important characteristics of the production function are also explained in this paper. These would include, but are not limited to, items such as the returns to scale of the function, the separability of the function, the homogeneity of the function, the homotheticity of the function, the output elasticity of factors (inputs), and the degree of input substitutability that each function exhibits. Also explored are some of the duality issues that potentially exist between certain production and cost functions. The information contained in this paper could act as a pedagogical aide in any microeconomics-based course or in a production management class. It could also play a role in certain marketing courses, especially at the graduate level.
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A