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Question

The slope of MRTS _________________.

A
deltaLdeltaC
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B
deltaCdeltaL
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C
deltabdeltaa
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D
CL
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Solution

The correct option is C deltaCdeltaL
Marginal rate of technical substitution (MRTS) is the rate at which a firm can substitute capital with labor. It equals the change in capital to change in labor which in turn equals the ratio of marginal product of labor to marginal product of capital. MRTS equals the slope of an isoquant.
MRTS = delta C/deltaL

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