Consider a Production Function of the Form $Q = K ^ { 2 } L ^ { 2 }$

question 87

Multiple Choice

Consider a production function of the form $Q = K ^ { 2 } L ^ { 2 }$ with marginal products $\mathrm { MP } _ { \mathrm { K } } = 2 \mathrm { KL } ^ { 2 }$ and $\mathrm { MP } _ { \mathrm { L } } = 2 \mathrm {~K} ^ { 2 } \mathrm {~L}$ . What is the marginal rate of technical substitution of labor for capital at the point where $\mathrm { K } = 5$ and $\mathrm { L } = 5$ ?

• A)5
• B)25
• C)50
• D)1

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Definitions:

Discontinued Operations

Components of a business that have been disposed of or are being held for sale, separate from continuing operations.

Transitory Component

Temporary fluctuations in financial or economic data that do not reflect long-term trends and are expected to revert over time.

Permanent Earnings Component

The part of a company's net income expected to continue in the future, excluding any extraordinary or one-time events.

Valuation-Relevant

Describes information or data that can significantly impact the valuation of a company's assets, liabilities, or equity.