Suppose the production function for automobiles is Q = KL where Q is the quantity of
automobiles produced per year, L is the quantity of labor (man-hours) and K is the quantity of capital (machine-hours). Suppose we sketch the isoquant corresponding to a quantity of Q = 100. Which of the following are true?
1. The isoquant is convex to the origin.
2. The general equation of an isoquant for this production function is K=100/L.
3. Marginal rate of technical substitution when K = 20 and L = 5 is 4.
4. Marginal rate of technical substitution MRTS L, K decreases as L increases.
ans c is right because MRTS lk=MPL/MPK NOW MPL= dQ/dl=k and mpk=dQ/k=l So MRS WHEN K=20 AND L IS 5... View the full answer