New Applications for Three-Dimensional Computer Graphics in Production Economics

Abstract

This paper illustrates the usefulness of high-resolution computer graphics to illustrate constrained optimization problems in production economics. A third degree polynomial production function reveals that for sufficiently small input levels, concave isoquants could occur within the region enclosed by the ridge lines. Another feature is the ability to reveal the function that is maximized or minimized in the constrained optimization problem and to see the linkages between the shape of the isoquants (product transformation and isocost curves) and the shape of the function being maximized in the constrained optimization problem. These techniques also permit a better understanding of the product-space counterparts to the factor space production surface. We also show that empirical analyses can benefit from computer graphics, particularly analyses employing flexible functional forms.