Homework Answers
The marginal rate of substitution of K for L = -2
MRTS(K,L) = MPK/MPL = -2
Ratio's between the marginal productivity of factors (K,L)
negative sign shows there is a negative relationship between capital and labour
the wage rate of labour = MPL
the rental rate of capital = MPK
since, MPK/MPL = 2
MPK = MPL*2 = 10
The rental rate of capital equal to 10
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