With the quantity of factor A measured on the vertical axis and the quantity of factor B measured on the horizontal axis, the slope of an isocost gives MPPb/MPPa.

Name: With the quantity of factor A measured on the vertical axis and the quantity of factor B measured on the horizontal axis, the slope of an isocost gives MPPb/MPPa.
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Question

Quizplus · Accepted Answer

The slope of an isocost line gives the ratio of the prices of factor A to factor B (Pa/Pb), not the marginal physical products (MPP) of B to A.

With the Quantity of Factor a Measured on the Vertical