Nature and Role of Substitution in Microeconomics
The concept of “substitution” was introduced by the Greek scientist
Archimedes (287-212 B.C) of Syracuse in his On the Sphere and
Cylinder. It is a work published by Archimedes in two volumes in 225
BC. Archimedes wrote: “Further of unequal lines, unequal surfaces,
and unequal solids, the greater exceeds the less by such a magnitude
as, when added to itself, can be made to exceed any assigned
magnitude among those, which are comparable with (it and with) one
another” (Heath, 1897, p.4). The signification of substitution can be
understood from the “law of substitution of similars” and the “axiom of
substitution”. The “law of substitution of similars” was applied in his
economic theory as the “law of indifference” by Wicksteed (Robertson,
1951, p. 243). But the “axiom of substitution” can be defined from the
economist's intuitive point of view - “Given a particular quantity of
some commodity of which a person is desirous, it is always possible to
find some quantity of other commodities sufficiently great to
compensate him for loss of part of his consumption of the given
commodity” (Chipman, 1960, p. 194). Stigler (1966, pp.25-26)
emphasizes that “there is no simple 'technical' measure of
substitution: not only is it difficult to compare heterogeneous things
(is radio a better substitute for television than for a theatre or a
newspaper?), but substitutability varies with circumstances (a tractor
is a substitute for a horse to a farmer, less so to a riding academy)”.
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