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 Manny Motors' operating budget increased?
A) It would shift rightward to a parallel position.
B) It would shift rightward to a nonparallel position.
C) It would shift leftward to a parallel position.
D) It would shift leftward to a nonparallel position.
E) Nothing.

Question

Quizplus · Accepted Answer

When the operating budget increases, the isocost line shifts rightward to a parallel position, indicating that more combinations of labor and robots can be purchased.

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