Which of the following formulas measures the rate of substitution for labor with capital?
A) -∆L/∆K
B) -∆K/∆L
C) ∆K/∆L
D) ∆L/∆K

Name: Which of the following formulas measures the rate of substitution for labor with capital? A) -∆L/∆K B) -∆K/∆L C) ∆K/∆L D) ∆L/∆K
Brand: Quizplus
Rating: 4.8 (34 reviews)

Question

Quizplus · Accepted Answer

The rate of substitution for labor with capital is measured by the marginal rate of technical substitution (MRTS), which is given by -∆K/∆L.

Which of the Following Formulas Measures the Rate of Substitution