If Labour Is Measured Along the Horizontal Axis and Capital

question 36

Multiple Choice

If labour is measured along the horizontal axis and capital is measured along the vertical axis,an increase in the wage rate will cause the isocost line to

• A) Rotate to the left along the labour axis, causing the firm to use less labour and more capital
• B) Rotate to the right along the labour axis, causing the firm to use less labour and more capital
• C) Rotate to the left along the labour axis, causing the firm to use less capital and more labour
• D) Rotate to the right along the labour axis, causing the firm to use less capital and more labour

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Definitions:

Business Activities

Operations and actions undertaken by a company to generate revenue, such as sales, service provision, and production.

Acquisition

The process of obtaining control of another corporation or asset.

Disposal

The act of getting rid of an asset through sale, exchange, retirement, or destruction.

Accounting Equation

The fundamental principle of double-entry bookkeeping: Assets = Liabilities + Equity, depicting the relationship between a company's resources and claims on those resources.