The Substitution Effect Indicates That a Profit-Seeking Firm Will Use

question 158

Multiple Choice

The substitution effect indicates that a profit-seeking firm will use

• A) more of an input whose price has fallen and less of other inputs in producing a given output.
• B) more of all inputs if production costs fall.
• C) more of those inputs whose marginal productivity is the greatest.
• D) less of an input whose price has fallen and more of other inputs in producing a given output.

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Definitions:

Cognitive Ability

The capacity to perform higher mental processes of reasoning, remembering, understanding, and problem-solving.

Cognitive Ability

The capacity to perform mental processes such as reasoning, problem-solving, and learning.

Cognitive Ability

Refers to the capacity of individuals to perform various mental processes like learning, thinking, reasoning, problem solving, decision making, remembering, and paying attention.

GREs

Standardized tests that measure verbal reasoning, quantitative reasoning, and analytical writing skills, commonly required for graduate school admissions.