Why does production function is called purely a technical relationship...
Introduction
The production function is the relationship between inputs and outputs in an economy. It represents the various combinations of inputs that can be used to produce a certain level of output.
Purely Technical Relationship
The production function is called a purely technical relationship between inputs and outputs because it only takes into account the physical relationship between inputs and outputs. It does not consider other factors such as the price of inputs or the demand for output. The production function is based solely on the technical relationship between inputs and outputs, and it assumes that the production process is efficient and effective.
Inputs and Outputs
The production function defines the relationship between inputs and outputs by using a mathematical equation. The inputs are the resources that are used in the production process, such as labor, capital, and raw materials. The outputs are the goods and services that are produced by using these inputs.
Efficiency and Effectiveness
The production function assumes that the production process is efficient and effective, meaning that it uses the minimum amount of inputs to produce the maximum amount of outputs. This assumption is based on the idea of technological progress, which refers to the development of new and more efficient production methods.
Conclusion
In conclusion, the production function is a purely technical relationship between inputs and outputs. It defines the relationship between inputs and outputs based on the physical relationship between them, and it assumes that the production process is efficient and effective. The production function is an important concept in economics, as it helps to explain how inputs are transformed into outputs in an economy.