According to the Exchange Model of Production, When Two Firms

question 15

Multiple Choice

According to the exchange model of production, when two firms are in competitive equilibrium

• A)the MRTS for two firms will be equal.
• B)the marginal products of capital and labor for each firm will be equal.
• C)both firms will demand the same quantities of labor and capital.
• D)the prices of labor and capital will be at the lowest possible level.

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Definitions:

F Statistic

A ratio used in the analysis of variance (ANOVA) to determine whether the means of several groups are equal.

ANOVA Table

A table used in analysis of variance that shows the sources of variability in the data and helps in determining whether there are significant differences between group means.

Pooled Standard Deviation

A method for estimating the standard deviation across two or more independent groups that assumes a common true standard deviation.

One-Way ANOVA

A specific type of ANOVA that analyzes the influence of a single independent variable on a dependent variable across two or more groups.