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

Question 91

Multiple Choice

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 MCc = 4Qc and the marginal cost of a desk is MCd = 2 + Qd.The current production level of candy (Qc) is 4 pieces and of desks (Qd) is 30.What can be said about the marginal utility of candy (MUc) and the Marginal utility of desks (MUd) ?


A) 3*MUc = MUd
B) MUc = 0.5*MUd
C) MUc = MUd = 4
D) MUc = 2*MUd

Correct Answer:

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