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Marginal rate of substitution |
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Marginal rate of substitutionIn a production function or a utility function, the ratio at which one argument (input) substitutes for another along an isoquant or indifference curve.Similar MatchesElasticity of substitutionElasticity of substitutionThe elasticity of the ratio of two inputs to a production (or utility) function with respect to the ratio of their marginal products (or utilities). With competitive demands, this is also the elasticity with respect to their price ratio. For example, with factors L,K and factor prices w,r, the elasticity of substitution of a production function F(K,L) is s = (wL/rK)d(K/L)/d(w/r). Asset substitutionAsset substitutionOccurs when a firm invests in assets that are riskier than those that the debtholders expected. Substitution effectSubstitution effectThat portion of the effect of price on quantity demanded that reflects the changed tradeoff between the good and other alternatives. Contrasts with income effect. Import substitution development strategyImport substitution development strategyA development strategy followed by many Latin American countries and other LDCs that emphasize import substitution-accomplished through protectionism-as the route to economic growth. Constant elasticity of substitution functionConstant elasticity of substitution functionSee CES function Further SuggestionsSubstitution swapImport substitution Same day substitution No Substitution |
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