ABSTRACT
We must now generalize the analysis of the previous chapter to allow for the fact that there are more than two factors of production and more than two products. There are more than one type of land (hilly land and flat land) and more than one type of labour (men capable of heavy physical work and men capable of delicate accurate work). There are a large number of products which are produced for the final consumer. We must now envisage a whole range of industrial processes each of which uses some or all of the factors (L, M, N, etc.) to produce some or all of the products (X, Y, Z, etc.). Some processes will not employ some factors nor produce some products; a steel mill will not employ any hilly land nor produce any milk as a bye-product. But nevertheless we have now to allow for the possibility (which we ignored in the previous chapter) that some processes will produce more than one product as well as employing more than one factor. Thus a sheep farmer employs land and labour to produce wool and mutton.
