The Rate at Which One Input Can Be Exchanged for Another

question 7

Multiple Choice

The rate at which one input can be exchanged for another input without altering the level of output is called the:

• A)marginal product curve.
• B)average product curve.
• C)marginal rate of technical substitution.
• D)law of diminishing marginal productivity.

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Definitions:

Adam Smith

A Scottish economist and philosopher, widely known as the father of modern economics, best known for his theory of the invisible hand and the book "The Wealth of Nations."

Opportunity Cost

The outcome of selecting an alternative is the exclusion of potential benefits that could have been achieved with other selections.

Equilibrium Output

The level of output at which the quantity supplied equals the quantity demanded, leading to a stable market condition without surplus or shortage.

Purely Competitive Market

A theoretical market structure characterized by an infinate number of buyers and sellers, homogeneous products, and no barriers to entry or exit.