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- Title
Diminishing Returns and Linear Homogeneity: Comment.
- Authors
Rowe Jr., John W.
- Abstract
The purpose of this article is to examine, the economist Dieter Schneider's functions to see under what circumstances they are good representatives of the Knightian production function. The second is to develop equations representing the semi-Knightian production functions of the economist Sune Carlson. Schneider specifies the properties of a Knightian production function as: (1) the law of diminishing returns is represented by a three-dimensional surface that is symmetrical with respect to two inputs (2) if one input, b, is held constant, and the other input, a, varied, marginal returns to, a, at first increase and eventually diminish (3) output, x, is negative for a=O, and becomes positive for a greater than q, where q is some positive value of a. Apparently Schneider means his functions to be symmetrical in the non-rigorous sense. If a is held constant, the marginal product curve for b is similar to the marginal product curve derived from holding b constant and varying a. However, a special case of symmetry in the nonrigorous sense is symmetry in the rigorous, or mirror-image, sense.
- Subjects
PRODUCTION functions (Economic theory); ECONOMICS; PRODUCTION (Economic theory); CARLSON, Sune; SCHNEIDER, Dieter; DIMINISHING returns; MARGINAL productivity; ECONOMISTS
- Publication
American Economic Review, 1965, Vol 55, Issue 3, p532
- ISSN
0002-8282
- Publication type
Article