In microeconomics and macroeconomics, a production function is a function that specifies the output of a firm, an industry, or an entire economy for all combinations of inputs. This function is an assumed technological relationship, based on the current state of engineering knowledge; it does not represent the result of economic choices, but rather is an externally given entity that influences economic decision-making. Almost all economic theories presuppose a production function, either on the firm level or the aggregate level. In this sense, the production function is one of the key concepts of mainstream neoclassical theories. Some non-mainstream economists, however, reject the very concept of an aggregate production function. Q=A.L^a.K^b.Kf^1-a-b where Kf is foreign investment.
Read more about Production Function: Concept of Production Functions, Specifying The Production Function, Production Function As A Graph, Stages of Production, Shifting A Production Function, Homogeneous and Homothetic Production Functions, Aggregate Production Functions, Criticisms of Production Functions
Famous quotes containing the words production and/or function:
“I really know nothing more criminal, more mean, and more ridiculous than lying. It is the production either of malice, cowardice, or vanity; and generally misses of its aim in every one of these views; for lies are always detected, sooner or later.”
—Philip Dormer Stanhope, 4th Earl Chesterfield (1694–1773)
“The information links are like nerves that pervade and help to animate the human organism. The sensors and monitors are analogous to the human senses that put us in touch with the world. Data bases correspond to memory; the information processors perform the function of human reasoning and comprehension. Once the postmodern infrastructure is reasonably integrated, it will greatly exceed human intelligence in reach, acuity, capacity, and precision.”
—Albert Borgman, U.S. educator, author. Crossing the Postmodern Divide, ch. 4, University of Chicago Press (1992)