The Absolute Value of the Slope of an Isocost Line

question 243

Multiple Choice

The absolute value of the slope of an isocost line equals the ratio of

• A)the marginal productivities of the two inputs.
• B)the prices of the two inputs.
• C)the marginal utilities of the two inputs.
• D)the quantities of the two inputs.

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Definitions:

Contribution Margin Ratio

A financial metric indicating the portion of sales revenue that is not consumed by variable costs and therefore contributes to covering fixed costs.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit.

Break-even Point

The level of production or sales volume at which total revenues equal total costs, resulting in no net profit or loss.

Variable Expense

Costs that vary in relation to a company's operations.