According to the exchange model of production, when two firms are in competitive equilibrium
A) the MRTS for two firms will be equal.
B) the marginal products of capital and labor for each firm will be equal.
C) both firms will demand the same quantities of labor and capital.
D) the prices of labor and capital will be at the lowest possible level.
Correct Answer:
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Q10: In competitive equilibrium
A)the MRS of all consumers
Q11: In the Edgeworth box diagram, if the
Q12: On the consumption contract curve
A)supply equals demand
Q13: In equilibrium with an Edgeworth production box
A)MPK/MPL
Q14: A tax on all goods consumed
A)would not
Q16: An allocation of resources is Pareto optimal
Q17: According to the text, if a policy
Q18: The consumption contract curve
A)is always a straight
Q19: According to the invisible hand theorem, as
Q20: In the Edgeworth diagram model, a doubling
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