ABSTRACT
This chapter explains the process by which the ‘observed’ production methods considered in previous frameworks were selected from all of the available methods. The assumption of constant technical coefficients with respect to changes in output levels allows people to describe the production possibilities of each method by a single vector. The comparison of the prices of commodity c is independent of the numéraire adopted. The division changes the levels of all prices proportionally, without altering the switching points and the ordering of prices at any given rate of profit. The unpredictable behaviour of the value of capital per worker and, consequently, the possibility that at a switching point the value of capital per worker may either fall or rise show that the phenomenon of substitution between capital and labour, which is at the basis of the marginal theory of income distribution, does not hold in general.
