The rate at which one input can be exchanged for another input without altering the level of output is called the:
A)marginal product curve.
B)average product curve.
C)marginal rate of technical substitution.
D)law of diminishing marginal productivity.

Question

Quizplus · Accepted Answer

The concept of marginal rate of technical substitution (MRTS) refers to the rate at which one input can be replaced by another input without affecting the level of output. It measures the slope of an isoquant, which represents all the combinations of inputs that can produce a given level of output. The MRTS is important in production theory because it allows producers to optimize their input usage by choosing the combination of inputs that minimizes costs while maintaining the same level of output. The other options are not relevant to this concept. The rate at which one input can be substituted for another input without affecting the output, also known as the marginal rate of technical substitution, is the correct answer. The other options are related to the productivity of inputs, but not specifically to the rate of substitution between inputs.

The Rate at Which One Input Can Be Exchanged for Another