Author Question: A two-good economy is in a competitive equilibrium. The price of a piece of candy is 2 and the price ... (Read 24 times)

mia · **on:** Jul 1, 2018

A two-good economy is in a competitive equilibrium. The price of a piece of candy is 2 and the price of a desk is 12. The marginal cost of candy is given by MCc = 2Qc and the marginal cost of a desk is MCd = 4 + 4Qd. The current production level of candy is one piece. What is the output of desks?

A) Qd = 1
B) Qd = 2
C) Qd = 4
D) Qd = 5

Question 2

If the marginal rate of technical substitution for a cost minimizing firm is 10, and the wage rate for labor is 5, what is the rental rate for capital in dollars?

A) .5
B) 1
C) 2
D) 10

Yixagurpuldink · **Reply #1 on:** Jul 1, 2018

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