An Isoquant Shows the Various Combinations of Labor and Capital

question 49

Multiple Choice

An isoquant shows the various combinations of labor and capital that

• A) the firm will choose to employ in the long run.
• B) yield the same total cost.
• C) can produce some fixed level of output.
• D) minimize the firm's average cost of production.

---

Definitions:

Quality of Income

A measure of how easily a firm's accounting income can be converted into cash, reflecting the company's financial stability.

Price/Earnings Ratio

A financial ratio that measures a company's share price relative to its earnings per share, indicating how much investors are willing to pay per dollar of earnings.

Dividend Yield

A monetary ratio demonstrating the proportion of yearly dividends distributed by a corporation in relation to its share value.