Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An economy with many consumers (Amy, Hao, ...), many producers, two goods (A and B) and two inputs (L and K) is in a competitive

An economy with many consumers (Amy, Hao, ...), many producers, two goods (A and B) and two inputs (L and K) is in a competitive general equilibrium. Which of the following conditions are satisfied in this economy?

All that apply:

a) For every possible redistribution of inputs among the firms, the quantity of one output cannot be increased without decreasing the quantity of the other

b) MUAmyA = MCA and MUAmyB = MCB

c) For every possible redistribution of goods among the consumers, some of them will be better off and some of them will be worse off.

d) MRS = MRT

e) MRS = MRTS

f) PA = MCA and PB = MCB

g) MUAmyA = MUHaoA = PA

h) MRTS = PA / PB

i) MRSAB = PA / PB for all consumers

j) MRTS between labour and capital is the same for all firms, whether producing good A or good B.

k) the ratio of input marginal products must be equal to the ratio of input prices

l) MRT = MRTS for all firms, whether producing good A or good B

m) The absolute value of the slope of PPF (with good A on the horizontal axis) is equal to MCA / MCB, the ratio of marginal costs of producing goods A and B, at any point on PPF

n) MRT = w/r, where w is wage and r is the price of capital

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Advertising

Authors: William F Arens

16th Edition

1260735419, 9781260735413

More Books

Students also viewed these Economics questions

Question

In Python, lists are mutable while tuples are immutable. True False

Answered: 1 week ago

Question

Draw a labelled diagram of the Dicot stem.

Answered: 1 week ago