Assume the budget line is Y = 900 = pBB + pZZ = 9B + 18Z. Further assume that the marginal rate of substitution = MRS = MUŽ/MUB = -4B/Z. E. At L = 5 and K = 4, the marginal product labor is 3 and the marginal product of capit is 2. With capital on the y-axis, what is the marginal rate of technical substitution (MRTS)? %3D
Assume the budget line is Y = 900 = pBB + pZZ = 9B + 18Z. Further assume that the marginal rate of substitution = MRS = MUŽ/MUB = -4B/Z. E. At L = 5 and K = 4, the marginal product labor is 3 and the marginal product of capit is 2. With capital on the y-axis, what is the marginal rate of technical substitution (MRTS)? %3D
Chapter10: Cost Functions
Section: Chapter Questions
Problem 10.10P
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Transcribed Image Text:Assume the budget line is Y = 900 = pBB +
pZZ = 9B + 18Z. Further assume that the
marginal rate of substitution = MRS =
MUŽ/MUB = -4B/Z.
E. At L = 5 and K = 4, the marginal product of
labor is 3 and the marginal product of capital
is 2. With capital on the y-axis, what is the
marginal rate of technical substitution
(MRĪS)?
%3D
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