Suppose an economy with two goods (candy and desk)and two identical agents that is in a competitive equilibrium.The marginal cost of a piece of candy is given by MC_c = 3Q_c and the marginal cost of a desk is MC_d = 2 + 2Q_d.The current production level of candy is 6 pieces.What is the marginal rate of substitution (MRS)?

Question

Quizplus · Accepted Answer

The marginal rate of substitution (MRS) cannot be determined with the given information. The MRS depends on the preferences of the agents, which are not provided in the question. The production levels and marginal costs only provide information about the supply-side of the market, not the demand-side.

Suppose an Economy with Two Goods (Candy and Desk)and Two