Firm X Produces Output $x$ And Firm Y Produces Outputyusing Capital $K$

question 21

Multiple Choice

Firm X produces output $x$ and Firm Y produces outputyusing capital, $K$ , and labor, $L$ , as inputs. Firm X has marginal rate of technical substitution $M R T S ^ { x } { } _ { K } L = K _ { x } / L _ { x _ { 0 } }$ , while firm $Y$ has marginal rate of technical substitution $M R T S _ { K , L } = 9 K _ { y } / L _ { y }$ . Which of the following allocations satisfies input efficiency?

• A) Firm X has 5 units of \(K\) and 3 units of \(L\), and Firm Y has 3 units of \(K\) and 1 unit of \(L\).
• B) Firm X has 5 units of \(K\) and 5 units of \(L\), and Firm Y has 1 unit of \(K\) and 9 units of \(L\).
• C) Firm X has 9 units of \(K\) and 1 units of \(L\), and Firm Y has 5 units of \(K\) and 5 units of \(L\).
• D) Firm X has 5 units of \(K\) and 5 units of \(L\), and Firm Y has 1 unit of \(K\) and 3 units of \(L\).

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Definitions:

Psychological Health

A state of well-being in which an individual realizes his or her own abilities, can cope with the normal stresses of life, can work productively, and is able to make a contribution to his or her community.

Social Action

An act undertaken with the intention of causing change in society or in particular social structures.

Posttraumatic Growth

Posttraumatic growth refers to positive psychological changes experienced as a result of struggling with highly challenging life circumstances.

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The overall state of someone's emotional, psychological, and social well-being, influencing how they think, feel, and act.