Although isocost lines and budget lines are similar,they differ in that:
A)budget lines are linear while isocost lines can be curved.
B)the consumer is constrained to the budget line while the firm can have more than one isocost line.
C)the slope of a budget line equals the price ratio while the slope of an isocost line is not related to prices.
D)budget lines do not have a constant expenditure.

Question

Quizplus · Accepted Answer

Isocost lines represent combinations of inputs that a firm can purchase for a given cost, allowing for multiple lines at different cost levels. In contrast, a budget line represents the combinations of goods a consumer can purchase with a fixed budget, implying a single constraint at a time.

Although Isocost Lines and Budget Lines Are Similar,they Differ in That