Question

Question 4 Which of the following statements about the technical rate of substitution is false? (A) It is positive for monotonic production technologies. (B) It measures the slope of an isoquant. (C) It measures the degree to which inputs are substitutable for each other in the pro- duction process. (D) It equals the negative of two inputs' marginal products. (E) The phenomenon of diminishing technical rate of substitution reflects the idea that an input can be replaced more easily when it is abundant than when it is scarce. Question 5 Which of the following production functions does not exhibit constant returns to scale? (A) f(x1,x2) = x1 + x2. (B) f(x1,x2) = min{x1,x2}. (C) f(x1,x2) = x1x2. (D) f(x1,x2) = x/4x1/4. (E) f(x1,x2) = x/2x12.

Answer 1

Question 4)

A) It is positive for monotonic production technologies

This statement is false because , a monotonic prod technology represents a different production function and thus MRTS is invariant to monotonicity.

Question 5)

C) f(x1,x2) = x1.x2

o 6(kx, , KR2) = (kx) (4x2) = K² x, X IRS (Increasing ratrans to Not CRS scale)