Imagine a Simple Economy Composed of 2 Inputs: Z₁ and

question 79

Multiple Choice

Imagine a simple economy composed of 2 inputs: z₁ and z₂, and 2 goods, x₁ and x₂. The marginal rate of transformation between x₁ and x₂ can not be expressed as the:

• A)Absolute value of the slope of the production possibilities frontier.
• B)MP ² /MP ¹ where MP ² is the marginal product of z₂ in the production of x₂ and MP ¹ is the 2 2 2 2
• Marginal product of z₂ in the production of x₁.
• C)Marginal rate of technical substitution.
• D)MP ² /MP ¹ , where MP ² is the marginal product of z₁, in the production of x₂ and MP ¹ is 1 1 1 1
• The marginal product of z₁ in the production of x₁.

---

Definitions:

Factor 1

An element or component that contributes to a particular result or situation; can be considered as a contributing variable in different contexts.

Profit

The financial gain obtained when the revenue from selling goods or services exceeds the costs involved in their production or provision.

Production Function

A production function is an equation that describes the maximum output of a good or service an economy or firm can produce given the input resources it has available.

Labor

The human effort, whether physical or mental, used in the production of goods and services.