Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Economics


Home >> Microeconomics

Illustrate about the elasticity of substitution.

The Elasticity of Substitution:

The technical substitution’s marginal rate measures the slope of an isoquant. As well the elasticity of substitution measures the curvature of an isoquant. More exactly, the elasticity of substitution measures the percentage change within the factor ratio divided through the percentage change into the MRTS, along with output being held fixed. When we let ?(x2/x1) be the change into the factor ratio and ?MRTS be the change within the technical rate of substitution, it can express as follows:

σ = ((?(x2/x1))/(x2/x1))/(?MRTS/MRTS)

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M9581834

Have any Question?


Related Questions in Microeconomics

Question if the marginal cost of collecting garbage were

Question: If the marginal cost of collecting garbage were constant at $6 per pound, what would be the optimal level of garbage collection? The response must be typed, single spaced, must be in times new roman font (size ...

Question suppose you are in charge of a public-health

Question: Suppose you are in charge of a public-health campaign to improve prenatal development in the United States. Due to funding constraints you can only focus on one factor. What factor would be the focus of your ca ...

Question a john has 40 gallons of gasoline g and 20 bags of

Question: a) John has 40 gallons of gasoline (G) and 20 bags of sugar (S). For that market basket, John's MRSSG is 3G/1S. Maria has 40G and 50S. For that market basket, Maria's MRSSG is 1G/1S. Use a numerical example to ...

Question a local finance company will loan 8000 to a

Question: A local finance company will loan $8,000 to a home-owner. It is to be repaid in 24 monthly payment of $498 each. The first payment is due 30 days after the $8,000 is received. What interest rate per month are t ...

Question after the world pulled out of the great depression

Question: After the world pulled out of the Great Depression of the 1930s, many forecasters expected a repeat of that decline after World War II. Now, the chances of another depression of that duration seem extremely rem ...

Question a manufacturer of laptop computers operates a

Question: A manufacturer of laptop computers operates a plant with an annual capacity of 6,630,000 laptop units. One of his models is expected to sell 390,000 units in the coming year. How large should each product lot b ...

Question suppose a monopoly market has a demand function in

Question: Suppose a monopoly market has a demand function in which quantity demanded depends not only on market price (P) but also on the amount of advertising the firm does (A, measured in dollars). The specific form of ...

Question suppose that demand for rollerblades is given by

Question: Suppose that demand for rollerblades is given by D(p) = A - p. The cost function for all firms is C(y) = wy2 + f , where f is a fixed set-up cost. The marginal cost of production is MC(y) = 2wy. Assume that the ...

Question -q1 turnover costs savings - assume that training

Question - Q1. Turnover Costs Savings - Assume that training results in a 10 percent reduction in your turnover rate. Also, assume that the cost of a turnover is 1.5 times the departing employee's salary. For a given ave ...

Question if the perfectly competitive firm produces the

Question: If the perfectly competitive firm produces the output at which its marginal cost equals market price, it receives no profit (or a very tiny one) on the last unit it produces. Doesn't it make sense to produce fe ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved