A cow will produce 8500 lbs. of milk if fed either 5000 lbs. of hay and 6200 lbs. of grain or 5600 lbs. of hay and 5400 lbs. of grain. Over this range, the marginal rate of technical substitution between hay and grain is
A) 0.17.
B) 0.75.
C) 0.98.
D) 1.02.
E) 6.00.

Question

Quizplus · Accepted Answer

The marginal rate of technical substitution (MRTS) is calculated as the ratio of the change in grain to the change in hay. Here, the change in hay is 600 lbs (5600 - 5000) and the change in grain is 800 lbs (6200 - 5400). MRTS = 800/600 = 0.75.

A Cow Will Produce 8500 Lbs