Multiple Choice
Firm X produces output 
and Firm Y produces output 
using capital,K,and labor,L,as inputs.Firm X has marginal rate of technical substitution MRTSxK,L = Kx/Lx,while firm Y has marginal rate of technical substitution MRTSyK,L = 9Ky/Ly. Which of the following allocations satisfies input efficiency?
A) Firm X has 5 units of K and 3 units of L, and Firm Y has 3 units of K and 1 unit of L.
B) Firm X has 5 units of K and 5 units of L, and Firm Y has 1 unit of K and 9 units of L.
C) Firm X has 9 units of K and 1 units of L, and Firm Y has 5 units of K and 5 units of L.
D) Firm X has 5 units of K and 5 units of L, and Firm Y has 1 unit of K and 3 units of L.
Correct Answer:
Verified
Correct Answer:
Verified
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