Input Indivisibility and the Measurement Error

Abstract

The neoclassical theory of production supports the identity i.e. the Output-Labor ratio equals wage-labor ratio plus profit labor ratio. Here profit is treated as capital. The variables wage to labor ratio and capital to labor ratio are considered real variables in the neoclassical theory; so that the identity can be differentiated by these two variables in mathematical calculations of the growth of the output per unit of labor. The paper shows that these variables are not the real variables at all times. Hence, the derived measurement of this identity is not true. The paper tries to explain the topological behavior of these variables and explains the possible conditions to be the real numbers.