The Substitution Rates

question 57

Multiple Choice

The substitution rates

• A)decrease with each iteration of the simplex method.
• B)tell us the number of units of a basic variable that must be removed from the solution for another variable to enter the basis.
• C)tell the amount of one resource that can be substituted for another.
• D)tell us the amount of a resource that must be used to gain another unit of profit.
• E)None of the above

---

Definitions:

Specialization

The process of focusing resources on the production of one or a few goods and services to increase efficiency.

Exchange

The process of exchanging one item for another, particularly one of similar type or value.

Production Possibilities

The various combinations of goods and services that can be produced within an economy given the available resources and technology.

United States

The United States is a country located in North America, characterized by a federal republic governance structure and a highly developed mixed economy.