Question
Determine whether each of the following statements is True, False or Uncertain, and explain your answers. Jiwa and Niuwa are two students, who use time
Determine whether each of the following statements is True, False or Uncertain, and explain your answers.
Jiwa and Niuwa are two students, who use time (the only input) to produce marks (the output) by studying. They are in the same market for marks, which rewards each student with a fixed price per mark obtained. They also have the same time cost. For simplicity assume that there is no upper bound to marks. Jiwa is a mediocre student who struggles a lot in classes. Niuwa is an extremely bright student who can get all the subtle implications without even paying attention in lectures. In equilibrium, Jiwa's value marginal product (VMP) of the last hour in studying is strictly lower than that of Niuwa.
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