> It is funny here that you are arguing that long run decisions are difficult.
> However your "long-run" model is only one period. This was part of the
> confusion arising in our argument. A dynamic model will completely change
> your results.
>     Second your model does not profit maximizing as you say it is cost
> minimizing. You also provide no constraint. Any cost minimization problem
> assume that cost is minimized for a given level of output. It is obvious
> looking at the model that the given level of output differs according to
> which technique is chosen. In a dynamic model the level of output of corn
> and steel would be different according to the technique chosen. It is
> therefore misleading to show cost minimization assuming that the outputs
> under either technique are the same. In this case the static choice for
> output does affect the time path for output. You can therefore not seperate
> the static allocation from the dynamic allocation. You will get different
> answers. If you want to see what happens to factor demands in the long run
> you need dynamics.
>     If you want to see what the short run choice of technique is you still
> need to solve the dynamic model. The given level of output will be different
> under each technique you need to know that given level of output to
> determine which process is the least costly.
>     BTW Foley's problem set is dynamic it calls for finding growth rates.
> You can not discuss growth rates in a static model.


While Robert attempts to show a case to his favorite, his construction of
the model
might make him confused later on with many things left out unspecified or
only by
implicit assumptions which also mystify readers.

John's effort to explain to Robert about construction of (dynamic) model is
good enough,
and with details I seldom see in textbooks. In the first post, Robert
appears as if he tries
to raise doubts on economic theory, but then he changed into only a point in
the
production function, which is the "whole" model here, since there is nothing
else.

At least, this construction of model appears to me as "unconventional".

I must be confused, not amused.