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Isoquant lines represent ________ whereas isocost lines represent ________. Select one: a. technical efficiency; economic tradeoffs...

Isoquant lines represent ________ whereas isocost lines represent ________.

Select one:

a. technical efficiency; economic tradeoffs

b. economic efficiency; technical efficiency

c. economic efficiency; marginal costs

d. economic efficiency; economic tradeoffs

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Answer #1

Option A.

  • Isoquant lines represent technical efficiency whereas isocost lines represent economic tradeoffs.
  • Isoquant lines are also known as constant product curves as the producer's are indifferent on every point representated by that line. They are said to represent technical efficiency as they show how a same output can be produced at a constant rate by the combination of factors of production.
  • While the isocost lines, shows how the inputs can be adjusted to maximize their outputs and hence they represent ecomomic trade-offs.
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