If the wage rate is $10 per hour and the rental rate is $5 per hour,then the vertical intercept of the isocost line
A) is $2.
B) is 50 cents.
C) is $5.
D) can not be determined without more information.

Question

Quizplus · Accepted Answer

The vertical intercept of an isocost line represents the maximum amount of capital that can be rented if all the budget is spent on capital. It is calculated by dividing the total budget by the rental rate of capital. Without information on the total budget, the vertical intercept cannot be determined.

If the Wage Rate Is $10 Per Hour and the Rental