Answer to Question #128490 in Microeconomics for Miyoba

Question

Clearly distinguish between a substitute in consumption and a substitute in
production using examples to illustrate your answer.

Answer 1

Substitutes-in-consumption are two or more goods that satisfy the same wants or needs. Consuming one good means that buyers have no need to consume another.The consumers cannot consume both at once .i.e the need for transportation can be satisfied by either buying a utility vehicle or a motorcycle.

Substitutes in production are two or more goods that can be produced using the same resources. The production of one good prevents sellers from using the same resources to produce another.The sellers cannot produce both goods at once.i.e farmers can choose between substitute crops such as corns or soybeans.