Question

Say you own a Mexican place that produces, among other things, Mexican burritos. The marginal product of your last worker was 5. If the marginal rate of technical substitution between capital and labor is 0.5, then marginal product of capital is:_______.

A. 10.
B. 5.
C. 1.

Answer 1

its A) 10

Step-by-step explanation:

Answer 2

A. 10.

Step-by-step explanation:

Given that

The marginal product of your last worker is 5

The marginal rate of technical substitution between capital and labor is 0.5

So by considering the above information, the marginal product of labor is

= marginal product ÷ marginal rate of technical substitution between capital and labor

= 5 ÷ 0.5

= 10

By dividing the marginal product with the MRTS between labor and capital we can find out the marginal product of capital