--%>

Marginal Rate of transformation

Define? Marginal Rate of transformation?? Describe with the help of an illustration.

E

Expert

Verified

Marginal Rate of transformation or MRT is the rate at which the units of one good encompass to be sacrificed to generate one more unit of another good in a two goods economy.

Assume an economy generates only two goods X and Y. Moreover assume that by employing such resources completely and efficiently, the economy generates 1X + 10Y. If the economy decides to generate 2X, it has to cut down its production of Y by 2 units. Then 2Y is the opportunity cost of generating 1X. Then 2Y:1X is the MRT.

   Related Questions in Microeconomics

  • Q : Marginal and average revenue-market form

    In which market form is the marginal and average revenue of a firm always equivalent? Answer: Average and marginal revenue of a firm are for all time equivalents beneath perfect competition.

  • Q : State microeconomic Choose

    Choose microeconomic statement from following A) The real domestic output increased by 2.5 percent last year. B) Unemployment was 6.8 percent of the labor force last year. C) The price of personal computers declined last year. D) The general price level increased by 4

  • Q : Pre-tax and pre transfer income

    From 1950, the pre-tax and pre transfer income distribution comprises: (w) become more equitably distributed. (x) remained about constant. (y) become less equitably distributed. (z) moderated because the rich and the poor both lost income to the middl

  • Q : NOT cartelized product in market power

    Products which have NOT been cartelized comprise: (w) oil. (x) bananas. (y) sugar. (z) wheat. Can anybody suggest me the proper explanation for given problem regarding Economics generally?

  • Q : Production at exceeds marginal costs by

    For any profit-maximizing monopolist not capable to price discriminate, production arises at an output level where is: (w) price exceeds marginal costs [P > MC]. (x) marginal revenue exceeds marginal costs [MR >

  • Q : Market clearing price problem The

    The markets in which the current market price surpasses the market clearing price experience: (1) Surpluses. (2) Declining scarcity. (3) Unexpected inventory shrinkage. (4) Shortages. (5) Raised market demands. Find out the right a

  • Q : Define the term privatization What do

    What do you mean by the term privatization?

  • Q : DVCs related problem Choose the right

    Choose the right answer from following. Population growth remains high in most DVCs because: A) religious and sociocultural considerations favor large families. B) children may provide economic security for aging parents. C) children provide agricultural labor in rura

  • Q : Formula for the marginal utility I have

    I have a problem in economics on Formula for the marginal utility. Please help me in the following question. The formula for marginal utility of good X is as: (1) MU = change in U/ change in X. (2) MU = U/X. (3) MU = U1 U2. (4) MU = change in X/change in U.

  • Q : Who tries to buy low in expectation for

    A person who tries to buy low within expectation of being capable to sell high later is: (w) profiteer. (x) speculator. (y) financial intermediary. (z) capital supplier. Hello guys I want your advice. Please recommend some views fo