Suppose the production function for a firm is given by: q=4L +2K. If the firm currently has 20 units of capital (K) and 10 units of labor (L), then calculate the Marginal Rate of Technical Substitution (MRTSLK).(Round to the nearest two decimal places if necessary.)

Question

BlackTom AI · Accepted Answer

We start by identifying the marginal products from the given production function q = 4L + 2K.

- The marginal product of labor (MPL) is the partial derivative of q with respect to L: MPL = ∂q/∂L = 4. 
- The marginal product of capital (MPK) is the partial derivative of q with respect to K: MPK = ∂q/∂K = 2.

The marginal rate of technical substitution of labor for capital (MRTSLK) is the rate at which capital can be substituted for labor while holding output constant, which in this linear production setup equals the ratio of MPL to MPK: MRTSLK = MPL / MPK.

Plugging in the values, MRTSLK = 4 / 2.

Thus, the calculation involves computing the two marginal products and forming their ratio, showing how much K could be traded for an additional unit of L along an isoquant given the production function structure.

Suppose the production function for a firm is given by: q=4L +2K. If the firm currently has 20 units of capital (K) and 10 units of labor (L), then calculate the Marginal Rate of Technical Substitution (MRTSLK).(Round to the nearest two decimal places if necessary.)

View Explanation

Log in for full answers

Similar Questions

Which of the following is INCORRECT?

What is the relationship between marginal product and marginal cost?

When marginal product is at its maximum, what can be said about total product?

What is TRUE about short run and long run in production?

89 Refer to the diagram, where variable inputs of labor are being added to a constant amount of property resources. Marginal cost will be at a minimum for this firm when it is hiring A. Q3 workers. B. Q2 workers. C. Q1 workers. D. more than Q3 workers.

What is the relationship between marginal product and marginal cost?

More Practical Tools for Students Powered by AI Study Helper

Homework AI Solver

Stylized AI Paper Writer

Plagiarism Checker Assistant

Citation AI Academic Writing Tool

In-Class Translation Assistant

AI Note Generator

AI Quiz Answers

Past Exam Questions from University Test Bank

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler