What is the marginal rate of transformation (MRT)? The MRT is ( A. the amount of
ID: 1122278 • Letter: W
Question
What is the marginal rate of transformation (MRT)? The MRT is ( A. the amount of one good that must be given up to produce one additional unit of a second good OB. a consumer's willingness to pay for an additional unit of one good by consuming less of another good. O C. the amount by which one input can be reduced when one extra unit of another input is used so that output remains constant. O D. the combinations of two goods that can be produced with fixed quantities of inputs. O E. the efficient allocation of two inputs between two production functions. Explain why the MRT of one good for another is equal to the ratio of marginal costs of producing the two goods The MRT equals the ratio of marginal costs of producing two goods because O A. along an isoquant, the opportunity cost of producing more of one good is producing less of the other good. O B. along the production possibilities frontier, the ratio of marginal costs equals the ratio of the prices of the two goods. OC. along the production possibilities frontier, the total cost of producing one good is reduced by the same amount that the cost of producing another good increases O D. along the production possibilities frontier, the ratio of marginal costs equals the willingness of consumers to trade one good for an additional unit of another good along the production possibilities frontier, the total cost of production is decreasing O E.Explanation / Answer
The MRT is:-
A. The amount of one good that must be given up to produce one additional unit second good.
The marginal rate of substitution is the rate at which one good is sacrificed for producing one extra unit of second using, using the same scarce resources.
The MRT equals the ratio of marginal costs of producing two good because:-
D. along the production possibility frontier, the ratio of marginal costs equals the willingness of trading one good for an additional units of other good.
All consumers are better off with free trade between two couteries because trade
E. allows both counteries to produce those goods for which they have an absolute advantage.
Production possibility frontier shows the maximum possibility efficiency that can be attained using the resorces of an economy. Thus when couteries achieve this efficiency they can trade freely between each other . It will increase the efficiency of resources.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.