Technical efficiency – Condition under which firms combine inputs to produce a given output as inexpesively as possible.
Marginal rate of technical substitution of labor for capital: MRTSLK = w/r
Production possibilities frontier – Curve showing the combinations of two goods that can be produced with fixed quantities of inputs.
Marginal rate of transformation – Amount of one good that must be given up to produce one additional unit of a second good.
MRT = MCX/MCY = MRS = PX/PY