If Perfect Competition Prevails in a Two Good (X and Y)and

question 84

Multiple Choice

If perfect competition prevails in a two good (X and Y) and two input (L and K) economy,all of the following conditions are satisfied,except that:

• A)the price of good X is equal to the price of good Y.
• B)the marginal cost of producing good X is equal to the price of good X.
• C)the marginal rate of substitution between X and Y is equal to the marginal rate of transformation.
• D)the ratio of the marginal costs of the inputs is equal to the input price ratio.

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Definitions:

Journal Entries

Records that document all the financial transactions of a business and show the accounts affected by each transaction.

Carrying Value

The book value of an asset or liability on a company's balance sheet, calculated as its original cost minus accumulated depreciation or amortization.

Bonds

A fixed income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage of the principal.