Use the following figure to answer the question : Figure 16-1 :shows the isoquants,IQ 1 and IQ 2 ,for a competitive firm.

-Refer to Figure 16-1.As compared to point B,the firm uses _____ at point A.
A)less labor and more capital
B)more labor and less capital
C)less capital and labor
D)more capital and labor

Question

Use the following figure to answer the question : Figure 16-1 :shows the isoquants,IQ 1 and IQ 2 ,for a competitive firm.

-Refer to Figure 16-1.As compared to point B,the firm uses _____ at point A.
A)less labor and more capital 
B)more labor and less capital 
C)less capital and labor 
D)more capital and labor

Quizplus · Accepted Answer

Moving from point B to point A, the isoquant curve shifts to the right, indicating an increase in output. Since the slope of the isoquant is negative, the firm must use more of one input (in this case, labor) and less of the other input (capital) to maintain the same level of output. Therefore, the firm uses more labor and less capital at point A than at point B.

Use the Following Figure to Answer the Question : Figure