If two inputs can be substituted for each other at a fixed rate then:
A) the inputs are perfect substitutes.
B) the inputs are imperfect substitutes.
C) the inputs are not substitutable.
D) the amount of each input is the same along an isoquant.
E) none of the above.

Question

Quizplus · Accepted Answer

If two inputs can be substituted for each other at a fixed rate, it means that the marginal rate of substitution is constant and the isoquants are linear. This is only possible with perfect substitutes, where the inputs can be substituted for each other in fixed proportions without affecting the production output.

If Two Inputs Can Be Substituted for Each Other at a Fixed