1. Explain the concept of marginal rate of technical substitution. What does a MRTS of 4...

1. Explain the concept of marginal rate of technical substitution. What does a MRTS of 4 mean? Is there any difference between production function and Iso-quant? Explain institutively what might cause the marginal product of labor to become negative.

Expert Solution

Marginal product of labour is defined as the change in output by hiring an additional unit of labour. Adding more labour when other factors of production are kept fixed will eventually lead to decline in MPL. As more units of labour is employed, keeping other factors fixed lead to inefficiency and disorganization which ultimately leads to fall in the output instead of increase in output.

Rahul Sunny answered 1 year ago

Explain the concept of marginal rate of technical substitution. What does a MRTS of 4 mean?...

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