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Calculating Marginal Product and MRTS

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Given the following function:

T=aK^-b L^c F^d = 0.02K ^-0.25 L^0.2 F^0.55

if K=100
L = 500
F =20,000

i) Calculate the marginal products associated with K L F.
ii) What is the MRTS between K and L
iii) What is the MRTS between K and F

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Solution Summary

The solution describes the steps to calculate Marginal Product and MRTS.

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i)Marginal product of K=MPK=dT/dK=0.02*(-0.25)K^(-0.25-1)L^0.2F^0.55
MPK=-0.005K^(-1.25)L^0.2F^0.55
Put value of K,L and F
MPK=-0.005*100^(-1.25)*(500^0.2)*(20000^0.55)= ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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