In an economy with two industries, food and clothing, the price of labor is $100 and the price of capital is $80. Input efficiency requires that the marginal:
A) rate of technical substitution of labor for capital be 100 in the food industry and 80 in the clothing industry.
B) rate of technical substitution of labor for capital be 1.25 in the food industry and in the clothing industry.
C) product of labor be 100 in the food industry, and the marginal product of capital be 80 in the clothing industry.
D) product of labor equal the marginal product of capital in the food industry and in the clothing industry.
Correct Answer:
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