Answer:
diminishing marginal rates of substitution.
Explanation:
Based on the information provided within the question it can be said that the principle that captures this is known as diminishing marginal rates of substitution. Like mentioned in the question this refers to the fact that a consumer chooses to replace a product instead of actually buying more. This decreases as you move down the indifference curve as shown below.
Answer:
(b). <u>Increase</u> ;<u> Decrease</u>
Explanation:
When the price of a substitute good rises, then it becomes more profitable for suppliers to shift to the other good. Therefore the supply of given good decreases, and the supply curve shifts leftward.
For example, if you're a textile manufacturer who produces cotton and silk clothes if the price of silk rises you'll reduce cotton production to divert resources towards silk. Therefore the demand for cotton clothes reduces.
Due to the leftward shift of the supply curve, the equilibrium price increases and equilibrium quantity decreases.
So we can conclude that an increase in the price of a substitute good will cause the equilibrium price of its substitute to <u>increase</u> and the equilibrium quantity to <u>decrease.</u>
Hence, the option (b) is the correct option.
The statements, which are examples of outsourcing, are, A company hires a local manufacturer to build its products, a company hires international workers for its customer service call center; and a company hires a marketing firm for branding. Therefore, option A is the correct option; that is, all these statements are true.
<h3>What is outsourcing?</h3>
Outsourcing is a kind of agreement that takes place between two or more organizations. It takes place generally in order to delegate the work of the organization to other organizations that provide such services to bigger organizations.
Outsourcing is one of the major economic activities in developing and underdeveloped countries, which provides work for companies in developed countries.
Since all of these statements are true, option A is the best choice.
Learn more about outsourcing here:
brainly.com/question/14202035
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