Author Question: If inputs into production cannot be substituted for each other but have to be employed in fixed ... (Read 112 times)

genevieve1028 · **on:** Jul 1, 2018

If inputs into production cannot be substituted for each other but have to be employed in fixed proportions isoquants are straight, downward-sloping lines.

Indicate whether the statement is true or false

Question 2

Unlike indifference curves, isoquants can intersect.

Indicate whether the statement is true or false

gcook · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

False. Isoquants are straight lines when inputs are perfect substitutes. When input relations are fixed they are right angles.

Answer to Question 2

False. By the same logic as with indifference curves, the intersection implies the same level of output. Since output increases as one moves toward the northeast on the isoquant map, moving from the intersection one isoquant shows higher output and the other shows lower. This is contradictory.