Question

please explain carefully

The manginal rate of transfoomation measures a) the comparative advantage of one producer over the other 61 the alternative cost of one good expressed in units of the second good c) the relative price of goods d) the relative preference for consumption of goods e) the slope of the iso-profit line A constant rent a) usualy docs not meet the participation constraint b) requires that effort is observable c) usually does not provide for optimal risk allocation d) usually does not meet the incentive compatibility constraint C None of the remaining answers is correct. constraint 9 None of the remaiming in

Answer 1

1) Solution: the alternative cost of one good expressed in units of second good

Explanation: The marginal rate of transformation is defined as the rate at which one good should be sacrificed for producing a single extra unit (or marginal unit) of another good, with the assumption that both goods require the same scarce inputs

2) Solution: None of the remaining answers is correct

Explanation: Constant or sometimes called a Lease Constant meet meet participation constraint and incentive compatibility constraint because participation constraint is not applicable to relationships. The efforts are also observable and risk can also be optimally allocated.