Asked by Bradley Fabretti on Jun 15, 2024
Verified
If a firm moves from one point on a production isoquant to another point on the same isoquant, which of the following will certainly not happen?
A) A change in the level of output
B) A change in the ratio in which the inputs are combined
C) A change in the marginal products of the inputs
D) A change in the rate of technical substitution
E) A change in profitability
Production Isoquant
A curve that represents all combinations of inputs that produce the same level of output, used in the analysis of production technology.
Marginal Products
The additional output that is produced by using one more unit of a particular input, holding other inputs constant, critical in the analysis of production efficiency.
Profitability
A measure of the efficiency with which a company or a business utilizes its resources to generate profits.
- Understand the function of isoquants and acknowledge their value in the study of production theory.
- Decode the implications of technical rates of substitution within the framework of input-output relationships.
Verified Answer
LS
LivingLifeWith SuperiorJun 20, 2024
Final Answer :
A
Explanation :
Moving from one point on a production isoquant to another point on the same isoquant means that output remains constant. Therefore, there will be no change in the level of output. However, the other options may or may not change depending on the movement along the isoquant.
Learning Objectives
- Understand the function of isoquants and acknowledge their value in the study of production theory.
- Decode the implications of technical rates of substitution within the framework of input-output relationships.