The Figure Below Shows the Isocost Lines and the Isoquant

question 3

Multiple Choice

The figure below shows the isocost lines and the isoquant map for a firm producing golf tees. FIGURE 8- 6
-Refer to Figure 8- 6. Suppose this firm is producing 3000 golf tees and is at point F on the isoquant map. In order to maintain its output and minimize costs this firm should

• A) not change its use of factors.
• B) employ more capital and less labour.
• C) employ more labour and less capital.
• D) move to an isocost line further from the origin.
• E) move to an isoquant closer to the origin.

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Definitions:

Sell Now

A directive or decision to sell an asset or product immediately, often due to market conditions.

Book Value

The net value of an asset as recorded on the balance sheet, calculated as the asset's cost minus any depreciation, amortization, or impairment costs.

Sunk Cost

Costs that have already been incurred and cannot be recovered or altered, and should not affect future business decisions.

Relevant Cost

Costs that will be affected by a decision in the future and therefore should be considered in decision-making processes.