Exercises · Q8
Q.
The following combinations of labour and capital lie on a single isoquant, all producing the same fixed level of output. Compute the Marginal Rate of Technical Substitution between each successive pair.
| Combination | Labour () | Capital () |
|---|---|---|
| A | 1 | 20 |
| B | 2 | 14 |
| C | 3 | 9 |
| D | 4 | 5 |
| E | 5 | 2 |
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✓ Free question
, computed between each consecutive pair (each step has ):
A to B: .
B to C: .
C to D: .
D to E: .
The MRTS falls steadily — — confirming that this isoquant is convex to the origin, and that each additional unit of labour substitutes for progressively LESS capital than the unit before it, exactly as the Law of Diminishing Marginal Rate of Technical Substitution predicts.
✓Final answer
: (A→B), (B→C), (C→D), (D→E) — a steadily diminishing rate.
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