Statement I: The substitution effect states that if the price of a resource rises,other resources will be substituted for it.
Statement II: The concept of margin is central to economic analysis.

Question

Quizplus · Accepted Answer

Statement I is correct as it depicts the substitution effect, which refers to the tendency of consumers and producers to switch to relatively cheaper goods or resources in response to a price rise in a particular good or resource. 
Statement II is also true as the concept of margin is central to economic analysis since it helps to examine changes in economic variables concerning a unit increase or decrease in another variable, which is important for economists to understand the complexities of decision-making.

Statement I: the Substitution Effect States That If the Price