A Change in Relative Factor Prices Will Always Result in

question 44

Multiple Choice

A change in relative factor prices will always result in

• A) a change in the slope of the isoquants.
• B) a tangency between the new isocost line and a new isoquant.
• C) a rotation of the isocost lines.
• D) All of the above.

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Definitions:

Finished Goods Inventory

An end item ready to be sold, but still an asset on the company’s books.

Raw Materials

Basic materials that are processed or refined to create a final product in manufacturing.

Monthly Sales

The total revenue or number of units sold by a business during a calendar month.

Supply Chain Costs

Expenses incurred in the production and distribution process of goods, from raw materials to final delivery to the consumer.