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Assume the budget line is Y = 900 = pBB + pZZ = 9B + 18Z. Further assume that the marginal rate of substitution =
Assume the budget line is Y = 900 = pBB + pZZ = 9B + 18Z. Further assume that the marginal rate of substitution = MRS = -MUZ/MUB = -4B/Z.
E. At L = 5 and K = 4, the marginal product of labor is 3 and the marginal product of capital is 2. With capital on the y-axis, what is the marginal rate of technical substitution (MRTS)?
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