Author Question: The slope of the production possibility frontier shows a. the marginal rate of substitution between ... (Read 73 times)

plus1

  • Hero Member
  • *****
  • Posts: 676
The slope of the production possibility frontier shows
 a. the marginal rate of substitution between the two goods.
  b. the relative marginal costs of the two goods.
  c. the efficient combination of outputs possible using fixed amounts of input.
  d. the relative marginal productivities of the two goods.

Question 2

Suppose two goods (X and Y ) are being produced efficiently and that the production of X is always more labor intensive than the production of Y. Production depends only on two factors (capital and labor); these may be smoothly substituted for each other. The total quantities of these inputs are fixed. An increase in the production of X and a decrease in the production of Y will
 a. increase the capital-labor ratio in each firm.
  b. decrease the capital-labor ratio in each firm.
  c. leave the capital-labor ratio for each firm unchanged.
  d. increase the capital-labor ratio in Y production and decrease the capital-labor ratio in X production.



lorealeza

  • Sr. Member
  • ****
  • Posts: 345
Answer to Question 1

b

Answer to Question 2

a



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Chronic marijuana use can damage the white blood cells and reduce the immune system's ability to respond to disease by as much as 40%. Without a strong immune system, the body is vulnerable to all kinds of degenerative and infectious diseases.

Did you know?

Many of the drugs used by neuroscientists are derived from toxic plants and venomous animals (such as snakes, spiders, snails, and puffer fish).

Did you know?

Drug-induced pharmacodynamic effects manifested in older adults include drug-induced renal toxicity, which can be a major factor when these adults are experiencing other kidney problems.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

For a complete list of videos, visit our video library