Constant-Elasticity-of-Substitution Simulation

Abstract

Program simulates constant elasticity-of-substitution (CES) production function. CES function used by economic analysts to examine production costs as well as uncertainties in production. User provides such input parameters as price of labor, price of capital, and dispersion levels. CES minimizes expected cost to produce capital-uncertainty pair. By varying capital-value input, one obtains series of capital-uncertainty pairs. Capital-uncertainty pairs then used to generate several cost curves. CES program menu driven and features specific print menu for examining selected output curves. Program written in BASIC for interactive execution and implemented on IBM PC-series computer.