Question
What does the elasticity of substitution
depict?Solution
Elasticity of substitution is the elasticity of the ratio of two inputs to a production (or utility) function with respect to the ratio of their marginal products (or utilities). In a competitive market, it measures the percentage change in the two inputs used in response to a percentage change in their prices. It gives a measure of the curvature of an isoquant, and thus, the substitutability between inputs (or goods), i.e. how easy it is to substitute one input (or good) for the other
How is LETTER written in the code language?
I. MASTER is written as NZHGVI
II. BOTTLE is written as YLGGOV
Statements: G ≤ H, H ≤ J, L < G
Conclusions: I. L < H II. J > L
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