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

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 2SQP
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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
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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