The marginal rate of technical substitution is equal to the:
A) slope of the total product curve.
B) change in output minus the change in labor.
C) change in output divided by the change in labor.
D) ratio of the marginal products of the inputs.

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) is a measure of how easily one input can be substituted for another input while holding output constant. It is calculated as the ratio of the marginal product of labor to the marginal product of capital (or vice versa). Therefore, the correct answer is D, which states that the MRTS is equal to the ratio of the marginal products of the inputs.

The Marginal Rate of Technical Substitution Is Equal to The