Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

note the points along a line from the origin which represent given
proportionate increases in inputs. These are shown in Figure 5.3
by dots along the three straight lines. The first set of dots were
selected to lie on the isoquant representing 50,000 ton-miles per
hour. Successive sets of dots represent, respectively, increases of
100 percent, 50 percent, and 33-1/3 percent. It can be observed that
the isoquants representing increases in output of 100, 50, and 33-1/3
, percent respectively, lie below the corresponding points on the line
1 , 1
: from the origin. Moreover, the isoquants lie increasing distances
1 below these points the greater is the rate of output. Again, this
1
situation indicates increasing returns to scale because proportion-
ate increases in all inputs are accompanied by greater than propor-
tionate increases in output. It is interesting to note that Howe
I found decreasing returns to scale for tow production. 18 This prop-
erty of the tow process function was attributed to the ,increased re-
sistance encountered as the tow widened relative to the width of the .
waterway. There is no factor comparableto the width of the water-
way in the train process function, and the absence of such a resist-
ing factor may account for the apparent increasing returns observed.
A qualification of the above results should be voiced at this
point. Recall that it was assumed in the above calculations that
only one locomotive unit was employed. Thus motive power was added
. . ..
to a train by using a more powerful locomotive. The rail process
function allows for the possibility of multiple locomotive units,
and the assumption of a single unit was made for simplification only.
Multiple units would typically be used when total motive power
155: