The Slope of an Isoquant Measures

question 57

Multiple Choice

The slope of an isoquant measures

• A) the price ratio of the two inputs.
• B) the average product of labour.
• C) the ratio of the marginal utility of the two inputs.
• D) the rate at which inputs can be substituted for each other keeping total output constant.

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Definitions:

Aggregate Income

The sum of earnings for all people and organizations within a specific economic system.

Consumption Function

A mathematical expression in economics showing how total consumption is related to the gross national income.

Consumption Function

A financial equation that illustrates the correlation between overall consumption and the gross national income.

Aggregate Income

The total income earned by all individuals or entities in an economy, including wages, profits, rents, and investment income, before taxes.