If the Marginal Rates of Technical Substitution Between Two Firms

question 66

Multiple Choice

If the marginal rates of technical substitution between two firms are not equal,then:

• A)the society is not on the production possibility frontier.
• B)the economy ends up producing on the contract curve of the economy's Edgeworth production box.
• C)goods are not allocated between consumers efficiently.
• D)the isoquants of the firms do not intersect each other.

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Definitions:

Profit Centers

Divisions or branches of a business that are treated as separate units for the purpose of calculating profitability, allowing for more focused financial analysis.

Decision Making

The cognitive process leading to the selection of a course of action among several alternatives.

Division Costs

Division costs pertain to the expenses associated with operating a specific department or division within a larger organization.

Division Revenue

The total amount of income generated from sales or services provided by a specific division within a company.