The rate at which one product can be "transformed" into another is referred to as:
A)the marginal rate of technical substitution.
B)the marginal rate of substitution.
C)the efficient transformation rate.
D)the marginal rate of transformation.

Question

Quizplus · Accepted Answer

The rate at which one product can be transformed into another is known as the marginal rate of transformation. This concept is often used in production theory and refers to the maximum amount of one product that can be produced, given a fixed amount of resources and technology used to produce both products. Option A refers to a different concept called the marginal rate of technical substitution, which measures the rate at which one input can be substituted for another while keeping output constant. Option B, the marginal rate of substitution, is a related but distinct concept used in consumer theory. Option C, efficient transformation rate, is not a commonly used term.

The Rate at Which One Product Can Be "Transformed" into Another