Question: Electric power is often generated by burning oil or gas to create steam. That steam is used to drive the turbines and produce electricity. One

Electric power is often generated by burning oil or gas to create steam. That steam is used to drive the turbines and produce electricity. One barrel of crude oil produces about 5.6 million BTUs of energy, while 1,000 cubic feet of natural gas produces 1,027,000 BTUs (http://www.physics.uci.edu/~silverma/units.html). Thus, an electric generating company can substitute 1 barrel of crude oil with 5,648 cubic feet of natural gas. Draw a few isoquants for this production process. What is the marginal rate of technical substitution?

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