If the price of labor is $5 and the price of capital is $10,what is the marginal rate of technical substitution at the optimal input choice?
A)0.5
B)2
C)decreasing
D)increasing
E)none of the above

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) at the optimal input choice is equal to the ratio of the input prices, which is the price of labor divided by the price of capital, i.e., $5/$10 = 0.5.

If the Price of Labor Is $5 and the Price