What are substitutes in production?
What will be an ideal response?
Goods are substitutes in production when one good can be produced in place of the other, that is, when the goods are produced using the same resources.
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At a fixed income level, an increase in consumption which is accompanied by a decrease in savings is reflected by
A) an upward rotation of the consumption function. B) an upward shift of the consumption function. C) a movement up along the consumption function. D) a downward rotation of the consumption function.
After a nation starts importing a good from overseas, the domestic price of the good
A) stays the same. B) rises. C) falls. D) might change, but more information about what the country exports is needed to determine if the price rises, falls, or does not change. E) might change, but more information about what else the country imports is needed to determine if the price rises, falls, or does not change.
At a firm's break-even point, its
A) total revenue equals its total opportunity cost. B) marginal revenue exceeds its marginal cost. C) marginal revenue equals its average variable cost. D) marginal revenue equals its average fixed cost.
To avoid the conflicts and suffering of a "zero-sum society," an economy must maintain a
A) positive rate of productivity growth. B) positive rate of inflation. C) foreign trade surplus D) government budget deficit.