The marginal rate of technical substitution is the absolute value of the slope of
A)an isocost
B)a production possibility curve
C)an isoquant
D)an indifference curve

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) measures the rate at which one input can be substituted for another input while holding the level of output constant. This occurs along an isoquant, which shows all the possible combinations of inputs that can produce a given level of output. The MRTS is equal to the absolute value of the slope of the isoquant at a particular point, so the best choice is C, an isoquant.

The Marginal Rate of Technical Substitution Is the Absolute Value