The Marginal Rate of Technical Substitution Is

question 45

Multiple Choice

The marginal rate of technical substitution is

• A)the rate at which the firm can substitute labor for capital while holding total cost constant.
• B)the rate at which the firm can substitute labor for capital while holding output constant.
• C)the slope of the isocost curve.
• D)both a and c
• E)none of the above

---

Definitions:

Fair Value Adjustment

An accounting practice of updating the book value of assets and liabilities to reflect their current market values.

Adjunct Asset

An addition to an asset that increases its value, often for accounting or tax purposes.

Equity Method

An accounting technique used to record investments in other companies by recognizing income and changes in investment value.

Book Value

The net value of an asset or liability recorded in financial statements, calculated as original cost minus accumulated depreciation or amortization.