Asked by
Eleonora Molinaro Simon
on Oct 14, 2024
Verified
A firm has the production function f(X, Y) X3/4 Y1/4, where X is the amount of factor x used and Y is the amount of factor y used.On a diagram we put X on the horizontal axis and Y on the vertical axis.We draw some isoquants.Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant, the isoquant has a slope of 9.The straight line we drew
A) is a ray through the origin with slope 3.
B) is a ray through the origin with slope 4.
C) is vertical.
D) is horizontal.
E) has a negative slope.
Isoquants
Curves that represent combinations of different factors of production that yield the same level of output, used in production theory.
Slope
The measure of the steepness or incline of a line, often calculated as the ratio of the vertical change to the horizontal change between two points on the line.
Production Function
Describes the relationship between input factors - like labor and capital - and the output of goods or services they produce.
- Comprehend the methodology for determining the slope of an isoquant and interpreting its consequences for optimizing production processes.
Verified Answer
KW
Learning Objectives
- Comprehend the methodology for determining the slope of an isoquant and interpreting its consequences for optimizing production processes.