Open AccessModeling Sustainable Economic Development Using Production Functions
Author(s) -
Oleksandr Yankovyi,
Viktor Koval,
Larysa Lazorenko,
Ольга Валеріївна Побережець,
Марина Новикова,
Vіktorіya Gonchar
Publication year - 2021
Publication title -
estudios de economía aplicada
Language(s) - English
Resource type - Journals
eISSN - 1697-5731
pISSN - 1133-3197
DOI - 10.25115/eea.v39i5.5090
Subject(s) - elasticity of substitution , marginal product , economics , production (economics) , substitution (logic) , factors of production , capital (architecture) , econometrics , function (biology) , cobb–douglas production function , production function , constant elasticity of substitution , marginal utility , productivity , commodity , technical progress , elasticity (physics) , microeconomics , computer science , macroeconomics , market economy , archaeology , evolutionary biology , biology , materials science , composite material , history , programming language
The most popular two-factor production functions used in the process of modeling sustainable economic development are examined. Economic and mathematical characteristics of Cobb-Douglas production functions, CES-function, linear function, Leontief and Allen functions are considered, in particular, type of dependence of labour productivity in relation to capital-labour ratio of commodity production system within mentioned production functions. Their most important economic and mathematical characteristics are presented: factors average and marginal return, demand for production resources, factor substitution, factors marginal rate of technical substitution, output elasticity by factors, elasticity of factors technical substitution, optimal capital-labour ratio according to the criterion of maximum output. Comparative analysis is given to Cobb-Douglas and CES-functions, which are two production functions mostly required in practice.