An isoquant is negatively sloped because
A) labor is productive and capital is not
B) both labor and capital are costly
C) labor and capital can replace each other in production
D) labor and capital can replace each other in expenditure
E) the ratio of marginal productivities rises, then falls

Question

Quizplus · Accepted Answer

Isoquant represents a combination of inputs that can produce a specific level of output. The negative slope of the isoquant indicates that labor and capital can replace each other in production. As we move down along the isoquant, more capital can be substituted for labor, and vice versa, without affecting the output level. Therefore, the slope of the isoquant is negative, and the answer is C.

An Isoquant Is Negatively Sloped Because