An efficient economy would set the marginal product in the traditional sector
A) lower than that in the modern non-traditional sector.
B) higher than that in the modern sophisticated sector.
C) equal to that in the modern sophisticated sector.
D) lower in the relatively capital intensive sector.
E) higher in the relatively capital intensive sector.

Question

Quizplus · Accepted Answer

An efficient economy allocates resources such that the marginal product of labor is equal across sectors, ensuring no further gains from reallocating labor.

An Efficient Economy Would Set the Marginal Product in the Traditional