Determination of equilibrium prices

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True or false questions, state the appropriate for each question:

2.1 Partial equilibrium analysis is described as the determination of equilibrium prices and quantities in a market which is partly dependent on effects from other markets.

2.2. An isoquant is a function that indicates the maximum output per unit of time that a firm can produce for every combination of inputs with a given technology.

2.3. Other things being equal, the increase in rents that occurs after rent controls are abolished is smaller when the price elasticity of demand for rental homes as such is price elastic in itself.

2.4. If the initial distribution of labour and capital is Pareto optimal, it is possible to reallocate labour and capital across industries so as to increase the production of one good without decreasing the production of another good.

2.5. In competitive markets, efficient production will be achieved where the marginal product of the two inputs is equal to the ratio of the input prices.

Reference no: EM132541908

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