Answer to Question #288823 in Microeconomics for nicole

Question

The marginal rate of technical substitution of labour and capital is defined as the rate at which the quantity of

Answer 1

The marginal rate of technical substitution of labor and capital is defined as the rate at which the quantity of capital can be reduced for every one unit increase in labor, and keeping output constant. It is the absolute value of slope of the isoquant drawn with labor on the horizontal axis, and capital on the vertical axis.