NotesFAQContact Us
Collection
Advanced
Search Tips
Peer reviewed Peer reviewed
Direct linkDirect link
ERIC Number: EJ922821
Record Type: Journal
Publication Date: 2007
Pages: 11
Abstractor: As Provided
Reference Count: 19
ISBN: N/A
ISSN: ISSN-0022-0485
Production Function Geometry with "Knightian" Total Product
Truett, Dale B.; Truett, Lila J.
Journal of Economic Education, v37 n3 p348-358 2007
Authors of principles and price theory textbooks generally illustrate short-run production using a total product curve that displays first increasing and then diminishing marginal returns to employment of the variable input(s). Although it seems reasonable that a temporary range of increasing returns to variable inputs will likely occur as variable inputs are added to a set of fixed ones. This proposition implies an isoquant diagram that is not a familiar one in text-books. The authors examine a linearly homogeneous production function conforming to the textbook case and construct its isoquant diagram. They then use a geometrical proof attributable to Geoffrey Jehle (2002) to demonstrate that, in general, isoquants must have, outside the traditional ridge lines, a range where they are convex toward those (MP = 0) ridge lines and another range where they are concave toward them if there are short-run increasing, then diminishing, marginal returns. The authors suggest how this issue might be presented to students. (Contains 3 figures, 2 tables and 8 notes.)
Routledge. Available from: Taylor & Francis, Ltd. 325 Chestnut Street Suite 800, Philadelphia, PA 19106. Tel: 800-354-1420; Fax: 215-625-2940; Web site: http://www.tandf.co.uk/journals
Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A