When labour is plotted on X-axis and capital is plotted on Y-axis and an isoquant is prepared, then which of the following statement(s) is/are false? 1. Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant. 2. Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour. 3. Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.

The correct answer is: Only 2.

The marginal rate of technical substitution (MRTS) of labor for capital is the rate at which labor can be substituted for capital without changing the output of a production process. It is measured as the change in the amount of capital that is used divided by the change in the amount of labor that is used, while holding output constant.

The slope of an isoquant is the negative of the MRTS. This is because the slope of an isoquant measures the rate at which labor can be substituted for capital while keeping output constant. The MRTS, on the other hand, measures the rate at which labor can be substituted for capital without changing output. Therefore, the slope of an isoquant must be the negative of the MRTS.

The marginal productivity of capital is the additional output that is produced when one additional unit of capital is used. The marginal productivity of labor is the additional output that is produced when one additional unit of labor is used.

The ratio of the marginal productivity of capital to the marginal productivity of labor is not equal to the MRTS. This is because the MRTS is a measure of the rate at which labor can be substituted for capital without changing output, while the ratio of the marginal productivity of capital to the marginal productivity of labor is a measure of the relative productivity of capital and labor.

Therefore, the only statement that is false is statement 2.