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3 August, 19:21

In the production of televisions, the marginal rate of technical substitution of hours of labor for hours of capital is 0.8, and the company chooses 5 units of labor and 8 units of capital. If the marginal product of capital is 10 televisions per hour, what is the marginal product of labor?

a. 0.08

b. 125

c. 8

d. 1.6

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Answers (1)
  1. 3 August, 19:35
    0
    Option (c) 8

    Explanation:

    Data provided in the question:

    Marginal rate of technical substitution of hours of labor for hours of capital, RTS = 0.8

    Number of units of labor chosen = 5

    Number of units of capital chosen = 8

    Marginal product of capital = 10 televisions per hour

    Now,

    RTS = [ Marginal product of labor ] : [ Marginal product of capital ]

    0.8 = Marginal product of labor : 10

    or

    Marginal product of labor = 8

    Hence,

    Option (c) 8
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