Question

Let's suppose that a firm's production technology is represented by the following production function

q = F( K, L) = min { 2K, L }

What is the MRTS when 2K > L

a. Infinite

b. 0

c.

1/2

d. 2

What is the MRTS when

a. 0

b. 1/3

c. infinite

d. 2

Answer 1

2K>L 2K = L 2K<L

Pink color L shaped curve is IsoQuant

So MRTS is Slope of isoquant

A) option A) infinite

when 2K> L, then Vertical segment of IC

So Slope of Isoquant = infinity

.

B) option A) zero

if 2K < L

Then horizontal segment,

So Slope = 0