Question

At L=64, K = 82, the marginal product of labor is 10 and the marginal product of capital is 20. What is the marginal rate of technical substitution ​(labor measured on the horizontal axis​)?
The marginal rate of technical substitution is _________.(Enter a numeric response using real number rounded up to two decimal places)

Answer 1

Answer:

-0.5

Explanation:

Marginal rate of technical substitution (MRTS) refers to the rate at which the inputs are substituted for one another in a production of particular good.

Given that,

The marginal product of labor = 10

The marginal product of capital = 20

Hence,

$MRTS=(-)\frac{MP_{L} }{MP_{K} }$

$MRTS=(-)\frac{10}{20}$

                 = - 0.5

Therefore, the marginal rate of technical substitution is - 0.5.