Production Function Graph Macroeconomics. Number of lumberjacks. X Vy max y Px y 2 Once the optimizationis carried out we have a numerically valued function of the form y fx1x2xn 3 Graphically we can represent the production function in two dimensions as in figure 1.
Q 2 10L 204 K 06. Since by definition capital is fixed in the short run our production function becomes latexQfleftLtextstackrel-Krighttextor QfleftLrightlatex This equation simply indicates that since capital is fixed then changing the amount of output eg. A production function shows the relationship between the amounts of factors used and the amount of output generated per period of time.
A production function shows the relationship between the amounts of factors used and the amount of output generated per period of time.
Now let us multiply the inputs by the constant α so that L 2 equals αL 1 and K 2 equals αK 1. Examples of such a function for a firm that uses a single input are shown in the next two figures. Then the production function becomes. PPF and Production Functions.
