B.4 Marginal rate of technical substitution | Production - Microeconomics

Learn more: www.policonomics.com/marginal-...
Spanish version: • B.4 Relación marginal ...
This video explains how to calculate and use the marginal rate of technical substitution (MRTS). We start by learning how to calculate it, then move on to use it in order to properly draw isoquant curves and, finally, we analyse the MRTS for different kinds of isoquants.
Related videos:
-Isoquants: • B.2 Isoquants | Produc...
-Production function: • B.1 Production functio...
Related articles:
-Marginal rate of substitution: www.policonomics.com/marginal-...
-Isoquants: www.policonomics.com/isoquant/
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[@ehmonja]

The video says Economics made easy and thats exactly what you did. Thank you

[@fysonelton9384]

Well explained. thank you. I need more of these videos

[@matti_martinez]

I am from Germany and your video is really good! I didn't understand all the vokabulary buuut your video is still helpful:) thanks!

[@ishamondal]

Thanks for sharing this video!

[@catherinefinley1241]

Amazing!Thanks a bunch!:)

[@tinotendatamanikwa3620]

hie ..if the mrts is less than1 what the situation should be like? thanx for the videos

[@jhlj1001]

I found this very informative. Thx.

[@alicanozdemir2445]

Thanks for the videos !

[@b7r57]

Oh my gosh! Your voice stole my heart ❤️

[@bqk95]

I wish I had discovered this channel way before my final Econ exam... Great video, though!

[@Policonomics]

Thank you +bqk178 !

[@fulikras2928]

For the typical Cobb-Douglas function, q= AKαLβ whereas APL /APK =1 , find out the marginal rate of technical substitution. Can someone help me with solution please?

[@SHUBHAMGUPTAversion]

great channel

[@diontaedaughtry974]

Great explanation

[@catherinefinley1241]

Thanks for the amazing video!I had a doubt why does the MRTS diminish along the isoquant?Thanks.:)

[@vaibhavgupta2383]

Bcoz of slope reduces

[@likithgullapudi2275]

@@vaibhavgupta2383 why slope decreases

[@liamdillon9465]

Great video

[@virtuousjoffrey8022]

Will the MRTS for perfect substitutes always have a line that is 45 degrees?

[@nerobest627]

yeah

[@siddhantkumar7864]

Why is MRTS different for horizontal and vertical lines of Perfect compliments ?

[@Policonomics]

Dear +siddhant rajak , The MRTS is different for each section of the isoquant is constant. A good example is workers (labour) and shovels (capital): if you only have one worker, you won't care about the amount of shovels you have after the first one, since there is no increase in output for having more shovels for just one worker. Therefore, in this example, the isoquant section for shovels will be the same from the first shovel, until infinity. We hope this answered your question! Thanks for watching, The Policonomics Team

[@roundersproduction]

Great 👍

[@warewolfenizer]

what happens when you have MPl/MPk?

[@Policonomics]

Hi warewolfenizer The analysis uses MPl/MPk when the axis are inverted (ie, labor on the x-axis and capital on the y-axis). The analysis is done in the same way. Just try to remember to change labor and capital in every step of the process. Thanks for watching!

[@SteveJobs_]

Why L & K curve is convex? What's the factor that made the graph? That's the only important thing in this theory.

[@ciarancoughlan3785]

Is the MRTS not MPL/MPK?

[@Policonomics]

Dear ciaran coughlan , It really depends on how you design the graph. Here, since K is in the X-axis, MRTS=MPK/MPL. This is because MPK=dQ/dK, and MPL=dQ/dL, and therefore dL/dK=MPK/MPL. Thanks for watching!

[@bewa89]

I think you swapped MRTS = infinite and MRTS = 0 at 2:03. Is that possible?

[@Policonomics]

Hi Ben Ha Min, You are completely right! We'll change it right away, we apologize for the inconvenience. Thanks for watching!

[@Policonomics]

Hi Ben Ha Min, We had to cut that part out, since the modification cannot be done without erasing the video. Indeed, at 1:56, the MRTS changes along the curve, and will tend to zero when diminishing the quantity of L and to infinite when diminishing the quantity of K. Anyway, thanks for the heads up! Thanks for watching!

[@AyushRaj-rx1su]

Very vas.,.grdeweg

[@user-ko4rr9ps6p]

Понял

[@hridaysheth7245]

Labor needs to be on the x-axis and capital on the y-axis though!

[@maiden5427]

Correct. I don't know what happened to her

[@ElTimotoQIK]

Not really. That would be the case if they were using dk/dl but they're using dl/dk instead.

[@ElTimotoQIK]

She already answered this in another comment 4 years ago

[@assil110]

Small mistake: MRTS= dL/dk = - MPK/MPL Because MKL and MPL are positive and dL/dk is the slope of the isoquant which is negative

[@victormendezrobles]

even a graph makes me think of her :(

[@victormendezrobles]

her marginal rate of technical substitution had my isoquant at 0