Imagine a simple economy composed of 2 inputs: z₁and z₂, and 2 goods, x₁and x₂. The marginal rate of transformation between x₁and x₂can not be expressed as the: A)Absolute value of the slope of the production possibilities frontier. B)MP ²/MP ¹where MP ²is the marginal product of z₂in the production of x₂and MP ¹is the 2 2 2 2 Marginal product of z₂in the production of x₁. C)Marginal rate of technical substitution. D)MP ²/MP ¹, where MP ²is the marginal product of z₁, in the production of x₂and MP ¹is 1 1 1 1 The marginal product of z₁in the production of x₁.

Question

Quizplus · Accepted Answer

The Marginal Rate of Transformation (MRT) is a concept distinct from the Marginal Rate of Technical Substitution (MRTS), which pertains to the substitution of inputs in production to keep output constant, not the trade-off between two goods in production.

Imagine a Simple Economy Composed of 2 Inputs: Z1 and

Imagine a Simple Economy Composed of 2 Inputs: Z₁and