differentiate between margiNal rate iof subsitution and marginal rate of technical subsitution.
Differentiations are as below:
|
# |
MRS |
MRTS |
|
1. |
This is the consumer willingness for replacing consumption of a product with another. |
This is the producer willingness for replacing input of a product with another. |
|
2. |
This is the trade-off between two goods. |
This is the trade-off between inputs. |
|
3. |
Formula = - Marginal utility of good X / Marginal utility of good Y |
Formula = Marginal product of labor / Marginal product of capital |
|
4. |
This is the demand-side of substitution rate. |
This is the production-side of substitution rate. |
differentiate between margiNal rate iof subsitution and marginal rate of technical subsitution.
with the aid of a diagram, differentiate between marginal rate of substitution for perfect substitutes and marginal rate of compliments?
The marginal rate of technical substitution is the ratio of Group of answer choices a. capital to the price of capital b. capital to labor c. the marginal product of labor to the marginal product of capital d. labor to the price of labor.
The marginal rate of technical substitution is a. the rate at which the firm can substitute labor for capital while holding total cost constant. b. the rate at which the firm can substitute labor for capital while holding output constant. c. the slope of the isocost curve. d. both a and c e. none of the above
If the inputs to a production process are perfect substitutes and the marginal rate of technical substitution is equal to the ratio of the prices of the two inputs, the firm can choose from a virtually infinite array of combinations of the two inputs to minimize the costs of producing a given level of output. True False
You might think that when a production function has a diminishing marginal rate of technical substitution of labor for capital, it cannot have increasing marginal products of capital and labor. Show that this is not true, using the production function Q = L2K2.
1. Suppose f(K,L)=[L+K]3, what is the MRTS? 2. Suppose f(K,L)=K(1/2)+L(1/2) Find the marginal rate of technical substitution. 3. f(K,L)=K(1/2)+L(1/2) Find the marginal rate of technical substitution.
a. What are the relationships among marginal utilities, the marginal rate of substitution, and the slopes of indifference curves? b. What are the relationships among marginal products, the marginal rate of technical substitution, and the slopes of isoquants?
(c) What is marginal rate of technical substitution? (d) What do we mean by returns to scale? Give examples of Cobb-Douglas production functions exhibiting increasing, decreasing and constant returns to scale. [A Cobb-Douglas production function takes the following form: Q = AKalpha Lbeta, ; A > 0, Alpha > 0, Beta> 0:
Differentiate between the single rate method and dual-rate method of cost allocation based on the usage of resources. [8 marks]
a) Differentiate between monetary targeting and interest rate targeting b) Under monetary targeting, money supply is fixed not money demand. Explain this. c) what is the relationship between Purchasing Power Parity and Quantity Theory of Money? d) Differentiate Uncovered and Covered Interest Rate Parity.