ECON-UB 1 Study Guide - Quiz Guide: Isoquant, Marginal Product, Production Function

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Problem set 4: suppose inputs are only substitutable at two units of labor for every one unit of capital. Mp =1: for each production function listed below, determine mp , mp , and mrts , . (i) q = 3l+6k. Since in order to maintain the same output, the decrease in one input must be compensated by the increase in the other output, isoquants slope downwards. (ii) isoquants further from the origin represent higher output. Isoquants shows all possible combinations of inputs that produce the same output. For the output to increase, either the amount of one input increases or both inputs increase. As a result, the isoquants representing higher output is further from the origin. (iii) isoquants cannot intersect. If two isoquants intersect, transitivity would be violated. Suppose isoquant 1 and isoquant 2 intersect at point b. Both on isoquant 1, point a and point b should produce the same output.

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