Figure 11-18

-Refer to Figure 11-18.A curve that connects points A, D, and E is called
A)an input-output curve.
B)a total cost line.
C)an expansion path.
D)an indifference line.

Question

Figure 11-18
 
-Refer to Figure 11-18.A curve that connects points A, D, and E is called
A)an input-output curve. 
B)a total cost line. 
C)an expansion path. 
D)an indifference line.

Quizplus · Accepted Answer

The curve that connects points A, D, and E is known as an expansion path, which shows the optimal bundles of two inputs (in this case, labor and capital) that a firm should use to produce different levels of output, while maintaining the same level of cost. Therefore, choice (C) is the correct answer. The other options (A, B, and D) are incorrect because an input-output curve refers to the relationship between inputs and outputs, a total cost line represents the total cost of production for a given level of output, and an indifference curve represents the combinations of two goods that provide the same level of satisfaction to a consumer.

Figure 11-18 -Refer to Figure 11-18.A Curve That Connects Points A, D