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6.14. Consider the following production functions and their associated marginal products. For each production function, determine the marginal rate of technical substitution of labor for capital, and indicate whether the isoquants for this production function exhibit diminishing marginal rate of technical substitution.

6.14. Consider the following production functions and their associated marginal products. For each production function, determine the marginal rate of technical substitution of labor for capital, and indicate whether the isoquants for this production function exhibit diminishing marginal rate of technical substitution.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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6.14. Consider the following production functions and their associated marginal products. For each production function, determine the marginal rate of technical substitution of labor for capital, and indicate whether the isoquants for this production function exhibit diminishing marginal rate of technical substitution. Diminishing Diminishing Diminishing Marginal Marginal Marginal Rate of Production Product of Product of Technical Function MPL MPK MRTSLK Labor? Capital? Substitution? Q = L + K MPL MPK = 1 = 1 1 VK 2 VI 1 VL MPK = 2 VK Q = VIK MPL = 1 1 2 VK 11 Q = Vī + VK MPL MPK = 2 VI Q = L'k? MPL = 3L?K? MPK = 3L°K? Q = L? + K? MP. = 2L MPK = 2K
Transcribed Image Text:6.14. Consider the following production functions and their associated marginal products. For each production function, determine the marginal rate of technical substitution of labor for capital, and indicate whether the isoquants for this production function exhibit diminishing marginal rate of technical substitution. Diminishing Diminishing Diminishing Marginal Marginal Marginal Rate of Production Product of Product of Technical Function MPL MPK MRTSLK Labor? Capital? Substitution? Q = L + K MPL MPK = 1 = 1 1 VK 2 VI 1 VL MPK = 2 VK Q = VIK MPL = 1 1 2 VK 11 Q = Vī + VK MPL MPK = 2 VI Q = L'k? MPL = 3L?K? MPK = 3L°K? Q = L? + K? MP. = 2L MPK = 2K
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