Which of the Following Are True in a Graph of Isoquants

question 11

Multiple Choice

Which of the following are true in a graph of isoquants (with capital on the vertical and labor on the horizontal) assuming a given wage and rental rate.

• A)All long-run cost minimizing input bundles lie on a ray from the origin.
• B)(a) is true only if the production technology is homothetic.
• C)All short-run cost minimizing input bundles lie on a horizontal line.
• D)(c) is true only if the production technology is homothetic.
• E)(a) and (c) are true.
• F)(b) and (c) are true.
• G)(a) and (d) are true.
• H)None of the above.

---

Definitions:

Plantwide Overhead Rate

A single predetermined overhead rate that is used throughout a plant.

Activity-based Management

A management strategy that focuses on optimizing activities to improve the value received by the customer and the profit gained by providing this value.

Waste Elimination

The process of identifying and removing non-value-added activities or materials in a production or business operation to improve efficiency and reduce costs.

Activity-based Costing

An approach to costing that focuses on activities as the fundamental cost drivers, and assigns costs to products and services based on their consumption of these activities.