Firm's Production Decisions Flashcards
0
Q
Marginal rate of technical substitution
A
The rate at which one factor input can be substituted for another at a given level of output
MRTS=MPl/MPk (l=labour, k=capital)
1
Q
Production isoquants
A
A function representing all possible combinations of factor inputs that can be used to produce a given level of output
2
Q
Isocost lines
A
Line showing the diff combination of factor inputs which can be purchased with a given budge
