Which of the following combination of inputs is most closely reflective of decreasing marginal rate of technical substitution (MRTS)?
A)oil and natural gas
B)sugar and high fructose corn syrup
C)computers and clerks
D)keyboards and computers

Question

Quizplus · Accepted Answer

The concept of MRTS refers to the rate at which a producer can substitute between two inputs while keeping the level of output constant. If the MRTS is decreasing, it means that it becomes more expensive to substitute one input for the other.

Out of the given options, the combination of computers and clerks is the most closely reflective of decreasing MRTS. This is because computers and clerks often perform complementary tasks in many industries, such as data entry, analysis, and communication. When more computers are added to the production process, the firm may find it harder to substitute clerks for computers, as the remaining clerks may have specialized skills or knowledge that cannot be easily replaced by machines. This leads to a decreasing MRTS between computers and clerks.

The other options do not necessarily involve complementary inputs or a decreasing MRTS relationship. Oil and natural gas, for instance, may have a constant or even increasing MRTS as the firm shifts between the two resources depending on their relative prices and availability. Sugar and high fructose corn syrup are both sweeteners and could have a constant MRTS as well. Keyboards and computers are both inputs to the same production process and are not necessarily substitutes for each other.

Which of the Following Combination of Inputs Is Most Closely