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Microeconomics II
book

Microeconomics II

by D.N. Dwivedi
August 2011
Intermediate to advanced content levelIntermediate to advanced
368 pages
14h 51m
English
Pearson India
Content preview from Microeconomics II
Welfare Economics: Pareto Optimality 293
Marginal Condition for Production Optimality
MRTS MRTS
L K
X
L K
Y
, ,
=
It means that the marginal rate of technical substitution (MRTS) between any pair of factors must be
equal for all commodities and all rms.
Marginal Condition of General Optimality
MRTS MRS MRS
x y x y
A
x y
B
, , ,
= =
It means that the marginal rate of transformation (MRT) between any pair of goods must be equal to
the marginal rate of substitution between them for any pair of consumers.
Some Additional Conditions of Pareto Optimality
In addition to the optimality conditions (a) and (b), the following marginal conditions must also be
simul ...
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Publisher Resources

ISBN: 9788131797655