Answered: The production function is Q = K.6 L.4.…

The production function is Q = K.6 L.4. The marginal rate of technical substitution is: 2/3 K-1 L. K-1 L-1. 2/3 K L-1. K.4 L-.6.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section: Chapter Questions

Problem 17PAE

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Question

The production function is Q = K^.6 L^.4. The marginal rate of technical substitution is:

2/3 K^-1 L.
K^-1 L^-1.
2/3 K L^-1.
K^.4 L^-.6.

Definition Definition Rate at which one factor of production is decreased in order to maintain the same level of output when another factor of production is increased. MRTS allows for the substitution between factors of production: labor (L) and capital (K) in order to maintain a given level of output.

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