Consider an economy with a representative household and a representative firm. In the competitive equilibrium, when total factor productivity decreases, the marginal rate of substitution of leisure into consumption _. Choose the correct one. O increases decreases doesn't change could either increase or decrease
Consider an economy with a representative household and a representative firm. In the competitive equilibrium, when total factor productivity decreases, the marginal rate of substitution of leisure into consumption _. Choose the correct one. O increases decreases doesn't change could either increase or decrease
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 1PA
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Transcribed Image Text:Consider an economy with a representative household and a representative firm. In the
competitive equilibrium, when total factor productivity decreases, the marginal rate of substitution
of leisure into consumption _. Choose the correct one.
O increases
decreases
doesn't change
could either increase or decrease
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