In order to produce any given amount of output in the least-cost way, choose the combination of inputs that is located on the lowest ___________ curve ___________ to the ___________ associated with the desired level of output.
A) isocost, tangent, isoquant
B) isocost, perpendicular, isoquant
C) isoquant, tangent, isocost

Question

Quizplus · Accepted Answer

The correct combination of inputs for producing a given amount of output in the least-cost way is found where an isocost curve is tangent to an isoquant. The isocost curve represents all combinations of inputs that cost the same amount, while the isoquant represents all combinations of inputs that can produce a certain level of output. Tangency between these two curves indicates the point of least cost for a given level of output.

In Order to Produce Any Given Amount of Output in the Least-Cost