Part 1: Aggregate Production Functions Section 1 Labor and Capital as Aggregate Inputs: Substitutability¶ Read this section across its overview and subsection pages. Overview Overview Subsection 1.1 The neoclassical production function Subsection 1.2 The firm's input choice Subsection 1.3 Isoquants and the marginal rate of transformation (MRT) Subsection 1.4 Substitution between capital and labor Subsection 1.5 Payment to factors: How does inequality change between capital and labor? Subsection 1.6 Input shares and input responses Subsection 1.7 Solving the firm's problem: Lagrangian approach Subsection 1.8 Substitutability cheatsheet Subsection 1.9 Historical background: John Hicks Subsection 1.10 Historical background: Wassily Leontief Back to this Part