DETERMINATION OF OPTIMUM OF CAPITAL-LABOUR RATIO WITHIN TWO-FACTOR PRODUCTION FUNCTIONS WITH NON-ZERO SUBSTITUTION BY THE PRINCIPLE OF EQUAL MARGIN

Oleksandr Yankovyi, Lydmila Sotnychenko, Angelina Petrashevska

Abstract


Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.Theoretical and applying aspects of using the principle of equal margin in microeconomics for the determination of the optimal capital-labour ratio within two-factor production functions with non-zero substitution are discussed. The use of the proposed algorithm is carried out on the example of such production functions as Cobb-Douglas function, linear, Leontief function, which are generalized by a function with constant elasticity of the substitution of factors. The purpose of this article is to offer a fairly simple opportunity for the economicmathematical determination of optimal capital-labour ratio within two-factor production functions with the non-zero substitution of resources on the basis of the principle of equal margin. Justified the principle of equal margin for the determination of optimal capital-labour ratio within two-factor production functions with nonzero substitution. The results of the study show that there are possibilities of the proposed approach to the analysis of extreme interconnections between production and aggregate factors of production. Practical recommendations on the application of these production functions in the process of econometric modelling and forecasting are given.

Keywords


principle of equal margin, production function, substitution of factors, optimal capital-labour ratio

Full Text:

PDF

References


Pyndaik R. & Rabynfeld D. (2002). Microeconomics. SPb.: Piter. (in Russian)

Galperin V.M. & Ignatev S.M. (2004). Microeconomics. SPb. (in Russian)

Perloff J.M. (2014). Microeconomics. Chapter 7: Costs. Retrieved from: http://wps.aw.com

Debertin D.L. (2012). Agricultural Production Economics. Amazon Createspace. Borovskoj D.N. (2008). Production functions and the problem of choosing the economic-mathematical model of the active element. Radіoelektronnі і kompjuternі sistemi, 1(28), 172-177. (in Russian)

Kazakova M.V. (2013). Analysis of the properties of production functions used in the decomposition of economic growth. Retrieved from: ftp://ftp.repec.org/opt/ReDIF/RePEc/rnp/wpaper/31.pdf (in Russian)

Podladchikov V.N. (2012). Microeconomics. Production functions. Retrieved from: http://i.kpi.ua/podladchikov/-menu=micro-firm-2-.htm (in Russian)

Cherevko J.V. (2007). Optimal capital stock and initial capital. Visnyk socialjno-ekonomichnykh doslidzhenj, 26, 359-365 (in Ukrainian)

Shumsjka, S. S. (2007). Production function in economic analysis: theory and practice of use. Ekonomika proghnozuvannja, 2, 138-153 (in Ukrainian)

Yankovyi V.A. (2017). The application of the CES function and associated production functions in economic research. Naukovyj visnyk Mizhnarodnogho ghumanitarnogho universytetu, 23 (2), 156-159. (in Russian)

Koval V., Slobodianiuk O., Yankovyi V. (2018). Production forecasting and evaluation of investments using Allen two-factor production function. Baltic Journal of Economic Studies Vol. 4, No. 1: 219-226. DOI: https://doi.org/10.30525/2256-0742/2018-4-1-219-226

State Statistics Service of Ukraine (2018). Retrieved from: http://www.ukrstat.gov.ua/




DOI: http://dx.doi.org/10.30525/2256-0742/2018-4-3-372-378

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.