Figure 7.3.4
-At the optimum combination of two inputs,
A) the slopes of the isoquant and isocost curves are equal.
B) costs are minimized for the production of a given output.
C) the marginal rate of technical substitution equals the ratio of input prices.
D) all of the above
E) A and C only

Question

Figure 7.3.4
-At the optimum combination of two inputs,
A) the slopes of the isoquant and isocost curves are equal. 
B) costs are minimized for the production of a given output. 
C) the marginal rate of technical substitution equals the ratio of input prices. 
D) all of the above 
E) A and C only

Quizplus · Accepted Answer

At the optimum combination of two inputs, the slopes of the isoquant and isocost curves are equal, costs are minimized for the production of a given output, and the marginal rate of technical substitution equals the ratio of input prices. This means all of the statements A, B, and C are correct, making D the correct choice.

Figure 7.3.4 -At the Optimum Combination of Two Inputs