Figure 11-17

-Refer to Figure 11-17.Assume that production isoquants are convex.Total cost and output produced must increase for each of the following movements except one.Which movement is the exception?
A)point a to point b
B)point a to point c
C)point b to point c
D)point b to point d

Question

Figure 11-17
 
-Refer to Figure 11-17.Assume that production isoquants are convex.Total cost and output produced must increase for each of the following movements except one.Which movement is the exception?
A)point a to point b 
B)point a to point c 
C)point b to point c 
D)point b to point d

Quizplus · Accepted Answer

Since production isoquants are convex, the movement from point b to point c would result in decreasing total cost for the same level of output produced. This is due to the law of diminishing returns where as more units of an input are added, the increase in output becomes smaller and smaller. Therefore, the other movements (a to b, a to c, and b to d) would result in an increase in both total cost and output produced.

Figure 11-17 -Refer to Figure 11-17.Assume That Production Isoquants Are Convex.Total Cost