Isoquants Are Usually Drawn Convex When Viewed from the Origin,reflecting

question 21

Multiple Choice

Isoquants are usually drawn convex when viewed from the origin,reflecting the standard assumption

• A)that both factors are subject to the law of diminishing returns.
• B)that the variable factor is subject to the law of diminishing returns.
• C)the positive marginal productivity of all factors.
• D)negative marginal productivity of all factors.
• E)that both factors are subject to increasing returns.

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Definitions:

Buyers' Value

The maximum amount a buyer is willing to pay for a good or service.

Price Comparison

The process of analyzing and evaluating the prices of similar goods or services across different suppliers or stores.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, indicating the economic benefit to consumers.

Equilibrium Price

The market price at which the quantity of a good supplied equals the quantity demanded, resulting in market balance.