When All Producers in an Economy Have Identical Marginal Rates

question 90

Multiple Choice

When all producers in an economy have identical marginal rates of technical substitution and all resources are used to produce goods, the:

• A)bundle of goods produced is on the production possibilities frontier.
• B)economy is in general equilibrium.
• C)marginal rate of transformation equals the common marginal rate of technical substitution.
• D)product mix is efficient.

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Definitions:

Risky Decision

involves making choices under conditions of uncertainty, where the outcomes may include potential losses or gains.

Reference Group

Groups of people that individuals compare themselves to for the purpose of evaluating their behaviors, attitudes, and norms.

Mere Exposure

A psychological phenomenon whereby people tend to develop a preference for things merely because they are familiar with them.

Group Effects

Influence on an individual's behavior, attitudes, or opinions due to the presence or pressure of a group.