If along an isoquant capital is reduced by 1 unit and labor is increased by 4,

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    four laborers are needed to replace the output lost by reducing capital by one, and so the marginal rate of technical substitution is equal to 1/4.
     four laborers are needed to replace the output lost by reducing capital by one, and so the marginal rate of technical substitution is equal to 4.
     four laborers are needed to replace the output lost by reducing capital by one, and so the marginal rate of technical substitution is equal to 4-1=3.
     Not enough information is given to solve this problem.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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four laborers are needed to replace the output lost by reducing capital by one, and so the marginal rate of technical substitution is equal to 1/4.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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