Abstract
Production is influenced by the law of increasing marginal product at relatively low quantities of production and decreasing marginal product at relatively high levels of production. This is reflected in the following production function:. with q for the quantity of production and l for the input of a production factor, for example, labour. Figure 8.1 gives a picture of a specific form of this production function.
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The following result can be derived: w(k) = pq(k) — rk-δk, w(k) = pq R(k) — rk, so:.
However, one might wonder whether a long duration of capital goods is always favourable to the conservationof natural resources. If the durationof capital goods is relatively long, then the introduction of nature-sparing technological innovations will take relatively more time. Indeed, many (nature-sparing) innovations are bound to new capital goods. In other words, many technological innovations are embodied (see: Heijman W.J.M., 1995. Austrian sustainability. In: Meijer G. (ed.), New perspectives on austrian economics. Routledge, London).
D. Ricardo, 1978 (1817). The principles of political economy and taxation. Everyman’s library, London. J.H. von Thünen, 1921 (1826). Der isolierte Staat. Fischer, Jena.
A. Weber, 1929 (1909). Theory of the Location of Industries. Chicago Press, Chicago. A. Predöhl, 1925. Das Standortsproblem in der Wirtschaftstheorie, Weltwirtschaftliches Archiv 21, pp. 294-331. W. Isard, 1956. Location and Space-Economy. John Wiley, New York. J.H.P Paelinck and P. Nijkamp, 1975. Operational theory and method in regional economics. Saxon House, Westmead.
See ‘Maximum production with a given budget’ in Chapter 2: Theory of production.
W.J.M. Heijman, 1990. The neoclassical location model of firms. In: F. Dietz, W. Heijman and D. Shefer, Location and Labor considerations for regional development. Avebury, Aldershot.
It can be proved that the spatial production curve of this kind derived from a Cobb-Douglasproduction function is always convex.
Because the production function for q, the budget B and the values of all the other coefficients is the same as in Case 1, the column with production q in Table 8.3 is the same as in Table 8.2. With given price p and the transport costs for the final product p tm all the other values can be computed.
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© 1998 Springer Science+Business Media Dordrecht
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Heijman, W.J.M. (1998). Production Factors. In: The Economic Metabolism. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-5038-5_8
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DOI: https://doi.org/10.1007/978-94-011-5038-5_8
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