If technological change is factor neutral,then the firm's isoquants:
A) shift out away from the origin.
B) shift in toward the origin.
C) do not change in appearance.
D) become flatter.

Question

Quizplus · Accepted Answer

If technological change is factor neutral, it means that it does not affect the input combinations required to produce a given level of output. Therefore, the isoquants representing the combinations of inputs that yield a constant level of output will not change in appearance, as they still represent the same output level with the same input combinations. The isoquants will only shift or change shape if there is a change in the production function, such as a change in the technology that affects the input-output relationship.

If Technological Change Is Factor Neutral,then the Firm's Isoquants