Final answer:
The isoquant equation and the value of the Marginal Rate of Technical Substitution (MRTS) for the given production function are calculated and interpreted.
Step-by-step explanation:
The production function given is Q=2KL+L¹/². To write down the isoquant equation, we need to set this function equal to a constant output level. Let's say the constant output level is Q0. So, the isoquant equation becomes Q0 = 2KL + L¹/². To calculate the value of the Marginal Rate of Technical Substitution (MRTS), we need to find the partial derivative of K with respect to L. Taking the derivative of the production function, we get MRTS = -L¹/² / 4K.
Interpreting the result, the MRTS represents the rate at which capital (K) can be substituted for labor (L) while keeping the output level constant. In this case, the MRTS is negative and decreases as the amount of labor (L) increases. This implies that as more labor is employed, it becomes more difficult to substitute capital for labor at the same rate, indicating diminishing marginal returns to labor.