A firm uses two factors of production. Irrespective of how much of each factor is used, both factors always have positive marginal products which imply that:
A) isoquants are relevant only in the long run.
B) isoquants have negative slope.
C) isoquants are convex.
D) isoquants can become vertical or horizontal.
E) none of the above

Question

Quizplus · Accepted Answer

Isoquants have a negative slope because a positive marginal product for both factors of production implies that to keep output constant (along an isoquant), an increase in the quantity of one factor requires a decrease in the quantity of the other factor. This trade-off results in a downward sloping isoquant.

A Firm Uses Two Factors of Production