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Homework answers / question archive / University of Pittsburgh-Pittsburgh Campus - ECON 1100 Intermediate Econ Third Quiz Fall 2014 1)If the marginal rate of technical substitution for a cost minimizing firm is 10, and the wage rate for labor is $5, what is the rental rate for capital in dollars? A
University of Pittsburgh-Pittsburgh Campus - ECON 1100
Intermediate Econ Third Quiz Fall 2014
1)If the marginal rate of technical substitution for a cost minimizing firm is 10, and the wage rate for labor is $5, what is the rental rate for capital in dollars?
A. .5 B. 1
w/MPL = r/MPK
What does this tell you about the marginal cost of increasing output through hiring labor and the marginal cost of increasing output through adding capital?
=
Intermediate Econ Third Quiz, Page 2 of ?? Fall 2014