The rate at which one input can be exchanged for another without altering output is called
A)the slope of the total product curve.
B)the marginal rate of technical substitution.
C)the slope of the marginal product of labor.
D)the law of diminishing returns of labor.

Question

Quizplus · Accepted Answer

The concept described in the question is known as the Marginal Rate of Technical Substitution (MRTS), which measures the rate at which one input can be substituted for another while keeping output constant. Option A is not correct as the slope of the total product curve measures the rate of change of output with respect to changes in the total amount of inputs used. Option C is incorrect because the slope of the marginal product of labor provides information about the rate at which output changes in response to employing an additional unit of labor. Option D describes a concept related to production, but it refers to the point beyond which increasing amounts of labor can result in decreasing marginal returns, rather than the rate of input substitution.

The Rate at Which One Input Can Be Exchanged for Another