Functional Relationships Assignment Example | Topics and Well Written Essays - 500 words

Functional Relationships - Assignment Example Therefore production function interlink inputs and outputs as in the case provided. Taking for example the industrial production of sugar at a sugar mill. For production of sugar several inputs are required for production process to be complete. Although there are many inputs from labor, fuel, sugarcane supply, water and machinery the main inputs are sugarcane supply. To produce output y, input x1 and x2 are required for it to be produced. Therefore, such input set has the following effects on production of y. x is the sum input x1 and x2 referred to as the isoquant. Consider a situation where there are two main inputs x1 and x2 for production of sugar. Let x1 be sugarcane supply and x2 be labor. All these inputs work together for production of sugar. For Y quantity of sugar to be produced the firm need to use x1 quantity of sugarcane and x2 labor in the firm. Therefore, production process requires different inputs put together to produce a given output required. Inputs such as labor, capital and raw materials are equally important in the production process. In conclusion, addition of extra inputs in production clearly has great impact in production process. Production functions are determined by inputs that are used. Such inputs for example labor, capital and raw materials are used in the production process to determine the amount of outputs in