Question 1 What is the production function? Develop a production function for a manufacturer who supplies the auto parts to a car manufacturer using 2 inputs combination. answ Production function represents a particular equation in economics to define the relationship between different productive factors. It includes capital, labour, and other factors that are necessary for the production of a specific product. For example a firm supplies auto part ( doors) to an auto manufacturer. To produce the auto part, firms use combination of Steel and Aluminium. The production function for auto part can be drawn as: Q =5 * A Where S is amount of steel and A is the amount aluminium. For example, to produce 100 units of auto part, it needs 100 pounds of steel and 100 pound of aluminium