ABSTRACT
Suppose that by incurring a fixed input cost equal to L2 units per period, the production technology q2 : max [0, F2(L z - L~)l can be substituted for the technology q2 : f 2(L 2), where F2(0) : 0, Fi > 0, F~ ~ 0 and f 2 (L2 ) < F2 (L z - L~) beyond some level of L2 (see Fig. 4). In terms of production possibilities society can increase its opportunity set over some region by producing less ql and investing the input savings in a substitute means of producing q2. In Fig. 5 the frontier of this substitute set is represented by S'.
