60 617
Assignments Done
97,8%
Successfully Done
In April 2018

Answer to Question #51677 in Microeconomics for chantizo

Question #51677
At L=4, K=4, the marginal product of labour is 2 and the marginal product of capital is 3. What is the marginal rate f technical substitution?
Expert's answer
At L=4, K=4 MPl = 2, MPk = 3. 
Marginal Rate of Technical Substitution (MRTS) is the amount by which the quantity of one input has to be reduced when one extra unit of another input is used, so that output remains constant. MRTS(K, L) = MPk/MPl = 2/3 = 0.67
So, the marginal rate of technical substitution is 0.67.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions