The horizontal (labor) intercept of Manny Motors' isocost line is 3 million, and the vertical (robot) intercept is 5 million. Which of the following best describes what would happen to the isocost line if the wage increased?
A) It would shift to the right.
B) It would rotate outward along the horizontal axis.
C) It would rotate inward along the horizontal axis.
D) It would rotate outward along the vertical axis.
E) It would rotate inward along the vertical axis.

Question

Quizplus · Accepted Answer

An increase in the wage would make labor more expensive, reducing the maximum amount of labor that can be hired for the same cost, causing the isocost line to rotate inward along the horizontal axis.

The Horizontal (Labor) Intercept of Manny Motors' Isocost Line Is