Consider a production function of the form $Q = K ^ { 2 } L ^ { 2 }$ with marginal products MP_K= 2KL² and MP_L = 2K²L. What is the marginal rate of technical substitution of labor for capital at the point where K = 5 and L = 5? A) 5 B) 25 C) 50 D) 1

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) is given by the ratio of the marginal products: MRTS = MP_L / MP_K. Substituting K = 5 and L = 5, we get MRTS = (2 * 5^2 * 5) / (2 * 5 * 5^2) = 1.

Consider a Production Function of the Form Q=K2L2Q = K ^ { 2 } L ^ { 2 }Q=K2L2

Consider a Production Function of the Form $Q = K ^ { 2 } L ^ { 2 }$