The marginal product of labor in the production of computer chips is 3030 chips per hour. The marginal rate of technical substit

Question

3 years ago

6

ution (MRTS) of hours of labor for hours of machine capital is 0.200.20. What is the marginal product of capital?

1 answer:

fredd [130] · Answer 1 · 2022-03-18T19:24:26+03:00

Answer:

150

Explanation:

As we know that

The marginal rate of technical substitution (MRTS) = Marginal product of labor ÷ Marginal product of capital

where,

The marginal rate of technical substitution (MRTS) = 0.20

And, the marginal product of labor is 30 chips per hour

So, the marginal product of capital is

= 30 chips per hour ÷ 0.20

= 150

The marginal rate of technical substitution (MRTS) shows a relationship between the marginal product of labor and the marginal product of capital