CA Foundation · Business Economics · Theory of Production and Cost
An isoquant is best described as a curve that shows:
An isoquant is a curve showing all the combinations of two inputs, such as labour and capital, that give the firm the same level of output. Equal-cost combinations are shown by an isocost line, and equal-satisfaction combinations by an indifference curve.
- AAll combinations of two inputs that yield the same level of outputCorrect
- BAll combinations of two goods that give a consumer the same satisfaction
- CAll combinations of inputs that cost the firm the same total amount
- DAll levels of output that can be produced at the same average cost
Explanation
An isoquant joins the various combinations of two inputs, such as labour and capital, that produce an identical quantity of output. The curve that joins equal-cost input combinations is the isocost line, and the equal-satisfaction curve is an indifference curve, so those options describe other concepts.
Did you get it right without looking?
One question tells you little. A timed set on Theory of Production and Cost shows your real accuracy, how long you take and where you lose marks.
More Theory of Production and Cost questions
- Which of the following best distinguishes the short run from the long run in production theory?
- A firm in Surat employs labour with the following data: 4 workers produce 40 units in total, and 5 workers produce 48 units in total. What a…
- A bakery in Pune doubles all its inputs (flour, ovens, labour) and finds that its output rises by exactly 100%. Which type of returns to sca…
- When the total product (TP) of labour reaches its maximum point, which of the following must be true of marginal product (MP)?
- A firm using labour (L) and capital (K) has a production function where output is Q = 2L + 3K. If it moves from (L=10, K=10) to (L=20, K=20)…
- When total product reaches its maximum point in the short run, which of the following is true?