Explain the term "marginal rate of technical substitution." (Assume a two-input production function.) O A. The MRTS gives the amount by which the quantity of one input must be increased when one extra unit of another input is used to keep output constant. O B. The MRTS gives the amount by which the quantity of one input can reduced when one extra unit of another input is used, so that output increases. O C. The MRTS gives the amount by which the quantity of one input must be increased when one extra unit of another input is used to increase output by one unit. OD. The MRTS gives the amount by which the quantity of one input can be reduced when one extra unit of another input is used, so that output remains constant. What does a MRTS = 2 mean? It means that if the input on the horizontal axis is increased by one unit, then the input on the vertical axis by 2 units and output will increase decrease not change

Explain the term "marginal rate of technical substitution." (Assume a two-input production function.) O A. The MRTS gives the amount by which the quantity of one input must be increased when one extra unit of another input is used to keep output constant. O B. The MRTS gives the amount by which the quantity of one input can reduced when one extra unit of another input is used, so that output increases. O C. The MRTS gives the amount by which the quantity of one input must be increased when one extra unit of another input is used to increase output by one unit. OD. The MRTS gives the amount by which the quantity of one input can be reduced when one extra unit of another input is used, so that output remains constant. What does a MRTS = 2 mean? It means that if the input on the horizontal axis is increased by one unit, then the input on the vertical axis by 2 units and output will increase decrease not change

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter11: The Firm: Production And Costs

Section: Chapter Questions

Problem 8P

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