The Principle of Substitution Plays a Central Role in Resource

question 40

Multiple Choice

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

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

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Definitions:

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A utility often found in database management systems that reduces file size and repairs issues within a database to improve performance and prevent data corruption.

Back Up

The process of creating a copy of data stored in a database or system to prevent loss of information in case of a failure or data corruption.

Convert

To change data from one format or type to another, such as converting text to number or a file to a different file format.