Author Question: The principle of substitution plays a central role in resource allocation because it demonstrates that (Read 92 times)

stananza · **on:** Oct 12, 2022

Question 1

Movement from one point to another along an isocost line implies a change in
◦ the level of output, independent of what happens to factor combinations.
◦ factor combinations, holding expenditure constant.
◦ output levels, holding factor combinations constant.
◦ expenditure.
◦ factor prices.

Question 2

The principle of substitution plays a central role in resource allocation because it demonstrates that
◦ methods of producing the same commodity will not differ from one country to another.
◦ prices will be relatively low for those factors for which demand is high relative to supply.
◦ relative factor prices reflect relative scarcities of factors in the economy and so firms will find it profitable to make abundant use of relatively abundant factors.
◦ firms will find it profitable to make abundant use of relatively scarce factors.
◦ firms can use all factors of production interchangeably with no impact on their costs.

tharris7314 · **Reply #1 on:** Oct 12, 2022

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Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

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