Question

1. If we take the production function and hold the level of output constant, allowing the...

1. If we take the production function and hold the level of output constant, allowing the amounts of capital and labor to vary, the curve that is traced out is called:

A. the total product
B. the average product
C. an isoquant
D. the marginal product
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Answer #1

Answer: option c) isoquant

An isoquant is a contour line drawn through the set of the point at which the same quantity of output is produced while changing the quantities of two or more inputs. Isoquants shows that a firm has the ability to substitute between the capital and labour in order to produce the same level of output.

Isoquants show the combinations of factors which produce the same level of output. Isocost shows the all combinations of inout that costs same. and when isocost and isoquant become tangent it shows optimal level of input for the cost minimization problem of firms.

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