Given the above graph,the marginal rate of technical substitution at point A is
A)less than 0.25.
B)less than 4.0.
C)greater than 0.25.
D)greater than 4.0.

Question

Given the above graph,the marginal rate of technical substitution at point A is
A)less than 0.25. 
B)less than 4.0. 
C)greater than 0.25. 
D)greater than 4.0.

Quizplus · Accepted Answer

The MRTS at point A is the absolute value of the slope of the tangent line to the isoquant curve that passes through point A. From the graph, we can see that this tangent line is steeper than the line with a slope of 1/4 (which passes through point B), but less steep than the line with a slope of 4 (which passes through point C). Therefore, the MRTS at point A is greater than 0.25, but less than 4.0. Choice C is the only option that reflects this range.

Given the Above Graph,the Marginal Rate of Technical Substitution at Point