Discussion
For downward movement along the iso-quant, MRTS of Labour per unit of capital (MRTSL,K) is given by
Answer: A
Along an isoquant, as labour is added capital is given up, so dK/dL is negative. The marginal rate of technical substitution of labour for capital is defined as the amount of capital that can be given up for one more unit of labour with output unchanged, a positive number, so MRTS(L,K) = - dK/dL, which is option (A). Option (B), dK/dL, is the slope and so is negative, and (C) and (D) are the reciprocal, dL/dK, which gives the substitution of capital for labour instead.
No comment is present. Be the first to comment.
Loading…
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development