If Capital and Labor Are Gross Substitutes in Production

question 19

Multiple Choice

If capital and labor are gross substitutes in production,

• A) then the scale effect dominates.
• B) then the substitution effect dominates.
• C) then the scale and substitution effects are of equal magnitude.
• D) then capital and labor must be used in a one to one ratio.
• E) then capital and labor cannot be used at the same time

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Definitions:

Strong Situations

Contexts or scenarios that significantly determine individual behavior through clear cues and expected actions.

Extraversion

A personality trait characterized by outgoingness, high energy, and sociability, often influencing an individual's approach to social interactions.

Social Situations

Various environments or contexts in which individuals interact with each other, governed by social norms and cultural standards.

Conscientiousness

A characteristic of being well-organized, reliable, and having a deep commitment to responsibilities.