1. (Semi-Short Essay) Wicksteed made a significant contribution to the theory of value during the marginal utility revolution. This contribution was “product exhaustion” which we derived in class. Explain the importance of this contribution. Explain the importance of Euler's theorem and the assumption of constant returns to scale in deriving the solution. How is this contribution similar to Marx's Problem of Transformation, how is it different?1. According to what Wicksteed suggested: the "addition problem which was the total product will be the sum of the total factor inputs which is multiplied by the marginal product". This Wicksteed theory is derived from Leonard Euler's theorem. This theorem showed that the exhaustion of the product will require a linear and homogeneous production function which will be the homogeneous function of the first degree. Once explained, the distributive shares will add up to the product, with the assumption that the production function will be such that increasing all inputs by a constant will lead to increasing the product in the same ratio (Formaini, 2001) . Exhaustion of the product will then require a certain constant return to scale in the absence of economies of scale. Wicksteed also suggested that economies will begin to manage resources in ways that contribute to securing the maximum target. The deliberate selection between various alternative applications of resources is consistent with the theory of Karl's transformation problem (Blaug, 1997). The transformation problem is known as the profit rate and value problem. But the problem is that industries differ in the paper business...and therefore companies can compete based on technological advancements (Schumpeter, 2006). Profit erosion and loss of market share can only be avoided through innovation and technology. The process of industrial transformation from a competitive to a monopolistic market and vice versa may be due to creative destruction. Thus, forms will target new attractive markets and exit saturated and low-yielding markets. This will make businesses sustainable but will ultimately lead to the failure of the link-make system. When explained in normative terms, technological obsolescence will create a negative externality of innovations and thus laissez-faire economies will tend to expand as well. many innovations, which represents too much growth. Thus the effect of “business theft” which is partly offset to the extent that innovations will be too limited within the framework of laissez-faire..