FIGURE 8-4
-Refer to Figure 8-4,with the isoquants and isocost line as shown.A firm that is producing at point C can reduce its costs for producing 1000 units by employing
A)less capital and less labour.
B)more capital and less labour.
C)less capital and more labour.
D)more capital and more labour.
E)less labour and the same capital.

Question

FIGURE 8-4
-Refer to Figure 8-4,with the isoquants and isocost line as shown.A firm that is producing at point C can reduce its costs for producing 1000 units by employing
A)less capital and less labour. 
B)more capital and less labour. 
C)less capital and more labour. 
D)more capital and more labour. 
E)less labour and the same capital.

Quizplus · Accepted Answer

At point C, the firm can move to a lower isocost line by using more capital and less labor, reaching a point where the isoquant is tangent to the isocost line, minimizing costs for the same output level.

FIGURE 8-4 -Refer to Figure 8-4,with the Isoquants and Isocost Line as Line