There is no difference between the law of diminishing marginal returns and the law of diminishing marginal rate of technical substitution. True or False.

Respuesta :

Answer:

False

Explanation:

There is a huge difference between Diminishing marginal utility and law of diminishing marginal rate of technical substitution. The diminishing marginal rate of utility is used to construct short-run production function and it is based on cardinal utility. Correspondingly, the law of diminishing marginal utility is used to construct long-run isoquants and isocost curve, and it represents ordinal utility.