Suppose an economy produces two goods,corn and wine.The marginal rate of substitution between corn and wine for consumers is 1C/3W and the marginal rate transformation is 1C/1W.What can be said about the output mix?
A) The output mix is inefficient;more wine and less corn should be produced.
B) The output mix is inefficient;less of both the commodities should be produced.
C) The output mix is inefficient;more corn and less wine should be produced.
D) The output mix is efficient.
Correct Answer:
Verified
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