The slope of an isoquant tells us A) the decrease in capital necessary to keep output constant when labor increases by one unit. B) the increase in when capital increases. C) the decrease in capital necessary to keep constant when labor increases by one unit. D) how much output increases when both inputs are increased.

A) the decrease in capital necessary to keep output constant when labor increases by one unit.

Explanation:

A marginal rate of technical substitution (MRTS) can be defined as an economic principle which is typically used to represent the rate at which a factor such as capital must decrease so that the same level or quantity of production is maintained when another factor such as labor is changed (increased).

An isoquant is the slope of a marginal rate of technical substitution (MRTS) which connects the two input factors provided that the level of output or production is the same.

Also, the diminishing marginal rate of technical substitution refers to the decline (fall) in marginal rate of technical substitution (MRTS) along an isoquant that produces the same quantity (level) of output.

When an isoquant has a diminishing marginal rate of technical substitution, the corresponding isoquants are convex to the origin. Thus, the marginal rate of technical substitution (MRTS) would continue to diminish as more of a factor such as capital is used.

Hence, the slope of an isoquant tells us the decrease in capital necessary to keep output constant when labor increases by one unit.

Additionally, the steeper an isoquant the greater is the marginal productivity of labor with respect to marginal productivity of capital.

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