A technical innovation in the production of automobiles by Ford Motor Company's for 1 million cars per year would necessarily
A)shift the "1 million car" isoquant away from the origin.
B)shift the "1 million car" isoquant toward the origin.
C)cause 1 million cars to be produced with more capital and less labor.
D)cause 1 million cars to be produced with more labor and less capital.

Question

Quizplus · Accepted Answer

A technical innovation in the production of automobiles would result in a more efficient use of resources, which would shift the production isoquant toward the origin. This means that for the same level of output (1 million cars per year), fewer resources (both labor and capital) would be required.

A Technical Innovation in the Production of Automobiles by Ford