The Marginal Rate of Technical Substitution Is

question 206

Multiple Choice

The marginal rate of technical substitution is

• A) the rate at which a firm is able to substitute one input for another, while keeping total cost constant.
• B) the rate at which a firm is able to substitute one input for another, while keeping the level of output constant.
• C) the rate at which a firm is able to institute positive technological changes to its production process.
• D) the rate at which a firm is able to increase its output by replacing labour with technology.

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Definitions:

Frank Gilbreth

An American engineer, consultant, and author, best known for his work in time and motion study alongside his wife Lillian Gilbreth.

Lillian Gilbreth

Lillian Gilbreth was a pioneering engineer and psychologist known for her contributions to industrial management and ergonomics, often working alongside her husband, Frank Gilbreth.

Frederick Taylor

Known as the father of scientific management, he introduced efficiencies in industrial productivity through time-and-motion studies and standardized tasks.

Scientific Management

A management theory that analyzes and synthesizes workflows, aiming to improve economic efficiency and labor productivity.