MRPS stands for Marginal Rate of Physical Substitution, which represents the rate at which a firm can replace one input with another while keeping the level of output constant. Therefore, it represents the physical tradeoff between outputs (choice B) and not between inputs (choice A), economic tradeoff between inputs (choice C), or economic tradeoff between outputs (choice D).

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The MRPS Represents

Question 21

Multiple Choice

The MRPS represents:

A) the physical tradeoff between inputs
B) the physical tradeoff between outputs
C) the economic tradeoff between inputs
D) the economic tradeoff between outputs

Correct Answer: