Author Question: In an economy consisting of only two goods, corn and cloth, the amount of extra cloth that can be ... (Read 122 times)

Chelseaamend · **on:** Jul 1, 2018

In an economy consisting of only two goods, corn and cloth, the amount of extra cloth that can be produced efficiently if corn output is reduced by one unit is equal to
a. the rate of technical substitution for corn divided by the rate of technical substitution for cloth.
b. the rate of technical substitution for cloth divided by the rate of technical substitution for corn.
c. the marginal cost of producing cloth divided by the marginal cost of producing corn.
d. the marginal cost of producing corn divided by the marginal cost of producing cloth.

Question 2

The rate of product transformation refers to
a. how a consumer can trade one good for another while still maximizing his or her utility.
b. how a firm can substitute one input for another and still maintain the same production level.
c. how production of one good can be substituted for another while still using a fixed supply of inputs efficiently.
d. how quickly a firm can produce a final good while starting with only natural resources.