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? (Select all that apply) 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 MRSAB = PA / PB for all consumers For every possible redistribution of goods among the consumers, some of them will be better off and some of them will be worse off. MRS = MRT MRS = MRTS PA = MCA and PB = MCB MUAmyA= MUHaoA = PA А MRTS = PA / PB MUAMYA = MCA and MUAmy B = MCB MRTS between labour and capital is the same for all firms, whether producing good A or good B. the ratio of input marginal products must be equal to the ratio of input prices MRT = MRTS for all firms, whether producing good A or good B For every possible redistribution of inputs among the firms, the quantity of one output cannot be increased without decreasing the quantity of the other MRT = w/r, where w is wage and r is the price of capital
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? (Select all that apply) 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 MRSAB = PA / PB for all consumers For every possible redistribution of goods among the consumers, some of them will be better off and some of them will be worse off. MRS = MRT MRS = MRTS PA = MCA and PB = MCB MUAmyA= MUHaoA = PA А MRTS = PA / PB MUAMYA = MCA and MUAmy B = MCB MRTS between labour and capital is the same for all firms, whether producing good A or good B. the ratio of input marginal products must be equal to the ratio of input prices MRT = MRTS for all firms, whether producing good A or good B For every possible redistribution of inputs among the firms, the quantity of one output cannot be increased without decreasing the quantity of the other MRT = w/r, where w is wage and r is the price of capital
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![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?
(Select all that apply)
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
MRSAB = PA / PB for all consumers
For every possible redistribution of goods among the consumers, some of them will be better off and some
of them will be worse off.
MRS = MRT
MRS
MRTS
PA = MCA and PB = MCB
MUAmy = MUHao
A = PA
MRTS = PA / PB
MUAmy
A = MCA and MUAmy
B = MCB
MRTS between labour and capital is the same for all firms, whether producing good A or good B.
the ratio of input marginal products must be equal to the ratio of input prices
MRT = MRTS for all firms, whether producing good A or good B
For every possible redistribution of inputs among the firms, the quantity of one output cannot be increased
without decreasing the quantity of the other
MRT = w/r, where w is wage and r is the price of capital
=](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3463a177-7def-4976-965f-4502bb575f7c%2Fda352053-7756-4054-829c-75115fb95f9e%2F39frzbm_processed.png&w=3840&q=75)
Transcribed Image Text: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?
(Select all that apply)
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
MRSAB = PA / PB for all consumers
For every possible redistribution of goods among the consumers, some of them will be better off and some
of them will be worse off.
MRS = MRT
MRS
MRTS
PA = MCA and PB = MCB
MUAmy = MUHao
A = PA
MRTS = PA / PB
MUAmy
A = MCA and MUAmy
B = MCB
MRTS between labour and capital is the same for all firms, whether producing good A or good B.
the ratio of input marginal products must be equal to the ratio of input prices
MRT = MRTS for all firms, whether producing good A or good B
For every possible redistribution of inputs among the firms, the quantity of one output cannot be increased
without decreasing the quantity of the other
MRT = w/r, where w is wage and r is the price of capital
=
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