A Firm Uses Two Factors of Production

question 105

Multiple Choice

A firm uses two factors of production. Irrespective of how much of each factor is used, both factors always have positive marginal products which imply that:

• A) isoquants are relevant only in the long run.
• B) isoquants have negative slope.
• C) isoquants are convex.
• D) isoquants can become vertical or horizontal.
• E) none of the above

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Definitions:

Marginal Probability

The probability of an event occurring, regardless of the possible outcomes of other related events.

Posterior Probability

The probability of assigning events or hypotheses after taking into consideration relevant evidence or background information.

Nominal Data

Represents data that can be categorized but not ranked or ordered numerically.

Interval Data

A type of numerical data that has meaningful differences between values and a true zero point.