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

question 42

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 doubles, and the price of capital falls by one-half. 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:

Health Status

Description of health of an individual or community.

Upper Body Strength

Physical strength in the muscles of the upper body, including arms, shoulders, chest, and back.

Drawsheet

A small bedsheet placed crosswise over the middle of the bottom sheet on a bed to assist in moving a patient or to protect the bed linens.

Full Body Sling

A device used in patient handling to support and lift someone with limited mobility, covering most of the body for a secure transfer.