Robinson (1953), have vigorously criticized this assumption2. The most commonly used type of neoclassical production function is the
Cobb-Douglas production function, which has the form
where 0 < ¢ < 1 and A is a constant scale factor. This production function displays constant returns to scale, meaning that doubling all the inputs exactly doubles output. When a production function displays constant returns to scale, we can always factor out the term 1/ N in order to express the function in per-worker terms. Thus, the Cobb-Douglas function becomes
recalling that y represents output per worker and k capital per worker. The great advantage of the production function in per-worker form is
that it permits us to represent a three-dimensional mathematical object (the production function itself) in two dimensions. Figure 16.1 illustrates the main properties of the Cobb-Douglas production function in per-worker form. As we increase the amount of capital per worker (called "substituting capital for labor"), the productivity of labor increases.