If Two Inputs Are Substitutes in Production,and an Increase in the Price

question 6

Multiple Choice

If two inputs are substitutes in production,and an increase in the price of one input shifts the demand curve for the other input to the left,then

• A) the scale effect is greater than the substitution effect, and the two are gross complements.
• B) the scale effect is less than the substitution effect, and the two are gross complements.
• C) the scale effect is greater than the substitution effect, and the two are gross substitutes.
• D) the scale effect is less than the substitution effect, and the two are gross substitutes.

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Definitions:

Checking Account

A bank account that allows for the deposit and withdrawal of funds, typically using checks, debit cards, and electronic transfers, intended for daily transactions.

Cashier's Check

A check issued by a bank or financial institution, guaranteed by the bank itself, used for making large payments where the payee requires assurance of payment.

Certified Check

A certified check is a type of check for which the issuing bank guarantees the availability of funds by verifying that enough money exists in the check writer's account to cover the check.

Written Order

A formal, documented directive given by a court, employer, or another authoritative entity.