Production function is as follows -
q = 2L + 4K
Marginal rate of technical substitution between two inputs is the ratio of their respective marginal products.
So,
Calculate the marginal product of labor (MPL) -
MPL = dq/dL = d(2L+4K)/dL = 2
Calculate the marginal product of capital (MPK) -
MPK = dq/dK = d(2L+4K)/dK = 4
Calculate MRTSLK -
MRTSLK = MPL/MPK
MRTSLK = 2/4 = 0.50
Thus,
The Marginal Rate of Technical Substitution (MRTSLK) is 0.50.
Suppose the production function for a firm is given by: q=2L +4K. If the firm currently...
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