In a small economy that produces smart phones and laptops, the marginal cost of a smart phone is $60 and the marginal cost of a laptop is $150. The marginal rate of transformation from smart phones to laptops is ____.

Question

Quizplus · Accepted Answer

The marginal rate of transformation (MRT) is calculated by dividing the marginal cost of one good by the marginal cost of another. Here, it's $150 (laptop) / $60 (smartphone) = 2.5.

In a Small Economy That Produces Smart Phones and Laptops