A General Competitive Equilibrium in Input Markets

question 68

Multiple Choice

A general competitive equilibrium in input markets:

• A)is attained at a point where the isoquants of the two goods intersect each other.
• B)involves an allocation of inputs such that the ratio of the input prices equals the ratio of the marginal revenue of the firms.
• C)is shown by an allocation of inputs that lies on the contract curve of an Edgeworth production box.
• D)is essentially related to an inefficient allocation of inputs between the production of any two commodities.

---

Definitions:

Direct Labor Cost

A rephrased definition: The cost incurred from the labor of workers who actively contribute to the manufacturing or creation of a product.

Split-off Point

The moment during a production process where multiple products become separately identifiable.

Joint Production Costs

The costs incurred in a production process that yields multiple products simultaneously up to the point of separation.

Processed Further

The additional processing or work done on a product after some initial manufacturing or production steps, often to add value or final features before sale.