Isoquants That Are Downward-Sloping Straight Lines Imply That the Inputs

question 8

Multiple Choice

Isoquants that are downward-sloping straight lines imply that the inputs

• A) are perfect substitutes.
• B) are imperfect substitutes.
• C) cannot be used together.
• D) must be used together in a certain proportion.

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Definitions:

Isocost Line

A graphical representation in economics that shows all possible combinations of inputs that cost the same total amount.

Slope

A measure of the steepness or incline of a line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Prices of Capital

Prices of capital refer to the cost of acquiring, maintaining, and using productive assets such as buildings, machinery, and equipment for producing goods or services.

Prices of Labor

Generally refers to the wages received by workers for their labor, determined by the supply and demand for labor in the market.