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Agriculture Economics QUESTION #11876
Question 1
The Marginal Rate of Technical Substitution ($MRTS$) between two inputs is defined as:
  • The ratio of their prices
  • The slope of the isoquant, or the rate one input substitutes for another holding output constant✔️
  • The ratio of total cost to total output
  • The change in output from an added unit of one input
Correct Answer Explanation
$MRTS$ is the slope of the isoquant, showing how much of one input must be given up to gain a unit of the other while output stays constant.