Assume That Capital Is Measured Along the Vertical Axis, and Labor

question 36

Multiple Choice

Assume that capital is measured along the vertical axis, and labor is measured along the horizontal axis. The firm has an initial isocost line called $T C _ { 1 }$ . Now suppose that the price of labor trebles and the price of capital also trebles. Which statement accurately describes the movement of the isocost line from $T C _ { 1 }$ to $T C _ { 2 }$ ?

• A) The slope of the isocost line becomes flatter.
• B) The slope of the isocost line becomes steeper.
• C) The slope of the isocost line is unchanged.
• D) We cannot determine whether the slope becomes flatter or steeper.

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Definitions:

Interbreed

To produce offspring by mating individuals of different species, breeds, varieties, etc.

Black Bears

A species of bear native to North America, known for its varied diet and adaptability to different habitats.

Brown Bears

Large omnivorous mammals found in various regions across the globe, characterized by their brown fur and significant size.

Overlap

The extent to which two or more entities share common areas, features, or functions.