Question

MRTS represents _______________.

• A. the rate at which a factor of production can be substituted for another
• B. the rate at which an individual will exchange successive units of one commodity for another
• C. the slope of indifference curve
• D. the slope of production possibility curve

Answer 1

The correct option is A the rate at which a factor of production can be substituted for another

Marginal Rate of Technical Substitution (MRTS) is the rate at which a factor of production can be substituted for another. For example the substitution between labour and capital needed for producing a given level of output.