ABSTRACT
The principle of variable proportion enters into all decisions relative to combining economic factors (inputs) for full production. In chemistry, we know that elements combine in definite proportions. For instance, the combination of 2 atoms of hydrogen with 1 atom of oxygen will produce 1 molecule of water: H2 + 0 -+ H20. No other combination of hydrogen atoms and oxygen atoms will produce water. What is true in this instance is also true in all other chemical combinations, and in oil production as well. In other words, a law of definite proportions governs the combination of the various chemical elements and the various factors of production, such as amount of labor, materials consumed and capital in a plant investment.
