1. Efficient Economic Production Anderson: Government Production and Pricing of Public Goods

2. Copyright © by Houghton Mifflin Company. All rights reserved. 2 Production of Public Goods and Services First, consider the case where the government actually produces a public good or service. An example is that of public schools where education is produced.

3. Recycling Capital Intensive

4. Recycling Labor Intensive

5. Copyright © by Houghton Mifflin Company. All rights reserved. 5 Figure 8.1: Product Curves for Production of a Public Good

6. Copyright © by Houghton Mifflin Company. All rights reserved. 6 Figure 8.2: Schooling Production Isoquants

7. Copyright © by Houghton Mifflin Company. All rights reserved. 7 Figure 8.3: Production with Inputs That Are Perfect Complements

8. Wassily Leontief

9. USSR Input-Output Tables

10. Copyright © by Houghton Mifflin Company. All rights reserved. 10 Figure 8.4: Fixed Ratio Production Technology

11. UC Berkeley – Wheeler Hall

12. George Dantzig

13. Jerzy Neyman

14. Copyright © by Houghton Mifflin Company. All rights reserved. 14 Figure 8.5: Schooling Isocost Lines

15. Copyright © by Houghton Mifflin Company. All rights reserved. 15 Figure 8.6: Optimal Input Combination

16. Aircraft Scheduling

17. School Bus Schedule

18. Garbage Collection Schedule

19. Constrained Optimization Using Excel

20. Decision Trees

21. Monte Carlo Simulation

22. Copyright © by Houghton Mifflin Company. All rights reserved. 22 Returns to Scale What is the effect of a proportional scaling of all inputs used in production? Increasing returns to scale Decreasing returns to scale Constant returns to scale

23. Copyright © by Houghton Mifflin Company. All rights reserved. 23 Example: Education Production Table 1 provides Hanushek’s findings based on analysis of 147 studies of education production functions in the literature. E.G., consider the teacher-pupil ratio, which we would expect to be positively related to student performance. Table lists effects of other inputs as well.

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