Abstract
• When f is a utility function, and x and y are goods, R yx is called the marginal rate of substitution (abbreviated MRS).
• When f is a production function and x and y are inputs, R yx is called the marginal rate of technical substitution (abbreviated MRTS).
• When f(x, y) = 0 is a production function in implicit form (for given factor inputs), and x and y are two products, R yx is called the marginal rate of product transformation (abbreviated MRPT).
Keywords
- Utility Function
- Production Function
- Cent Increase
- Product Transformation
- Marginal Rate
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References
These formulas will usually not be found in calculus texts. For (5.5)–(5.24), see e.g. Sydsæter and Hammond (2005). For (5.25)–(5.26), see Blackorby and Russell (1989) and Fuss and McFadden (1978). For elasticities of substitution in production theory, see Chapter 25.
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Sydsæter, K., Strøm, A., Berck, P. (2010). Elasticities. Elasticities of substitution. In: Economists’ Mathematical Manual. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-28518-2_5
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DOI: https://doi.org/10.1007/978-3-540-28518-2_5
Publisher Name: Springer, Berlin, Heidelberg
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