The Principle of Substitution Plays a Central Role in Resource

question 66

Multiple Choice

The principle of substitution plays a central role in resource allocation because it demonstrates that

• A)firms can use all factors of production interchangeably with no impact on their costs.
• B)methods of producing the same commodity will not differ from one country to another.
• C)prices will be relatively low for those factors for which demand is high relative to supply.
• D)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.
• E)firms will find it profitable to make abundant use of relatively scarce factors.

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Definitions:

Discrimination

The unfair or biased treatment of people from various groups, particularly based on their race, age, or gender.

Overweight Applicants

Candidates for a position who are perceived or actually weigh more than what is considered healthy for their height, potentially facing bias.

Leptin Levels

The concentration of leptin, a hormone primarily released by fat cells, which plays a key role in regulating energy intake and expenditure, including appetite and hunger.

Ghrelin Levels

Concentrations of ghrelin, a hormone that stimulates appetite, indicating hunger levels.