Which of the following is completely correct? a. MRTS = Slope of Isoquant = DK/DL b. MRTS = Slope...

Question:


Which of the following is completely correct?

a. MRTS = Slope of Isoquant = DK/DL

b. MRTS = Slope of Isoquant = DL/DK

c. MRTS = Slope of Isoquant = DMPK/DQ

d. MRTS = Slope of Isoquant = DMPK/DL

The Marginal Rate of Technical Substitution



The marginal rate of technical substitution shows the rate at which one input to production can be substituted for another. The relationship between inputs for a given level of production are shown by isoquants, and often, this relationship is not linear. Therefore, by drawing a tangent to the isoquant, we can work out at what rate you can substitute capital for labor (or whatever inputs are being mapped) by working out the slope of the tangent.

Answer and Explanation:


Assuming you draw the isoquant the traditional way, with capital on the y-axis, and labor on the x-axis, the slope of the tangent at any point on...

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Learn more about this topic:

Production Function in Economics: Definition, Formula & Example

from Introduction to Business: Homework Help Resource

Chapter 11 / Lesson 27
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