The production function relates the output of a firm to the amount of inputs, typically capital and labor.
It is important to keep in mind that the production function describes technology, not economic behavior. A firm may maximize its profits given its production function, but generally takes the production function as a given element of that problem. (In specialized long-run models, the firm may choose its capital investments to choose among production technologies.)
The EconModel application The Demand for Labor emphasize the role of the production function and marginal product in determining the profit-maximizing demand for labor.
Classic Economic Models
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Balance of Payments
Endogenous Technical Change
Federal Funds (Fed Funds) Rate
Fixed Exchange Rate
Floating Exchange Rate
Gross Domestic Product (GDP)
Production Possibility Frontier
Reservation Wage Rate
Theory of the Consumer
Theory of the Firm
Velocity of Money