Asked by Tesha Cherry on May 11, 2024
Verified
Use the following statements to answer this question. I. The numerical labels attached to indifference curves are meaningful only in an ordinal way.
II) The numerical labels attached to isoquants are meaningful only in an ordinal way.
A) both I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) both I and II are false.
Indifference Curves
A graph showing different bundles of goods between which a consumer is indifferent, reflecting the consumer's preferences.
Isoquants
Curves representing combinations of input factors that yield the same quantity of output, used to analyze production efficiency.
Numerical Labels
Represent identifiers in the form of numbers, used for categorization or sorting purposes.
- Pinpoint factors that denote upward, constant, or downward trends in production scalability.
Verified Answer
JY
Jordin YarbroughMay 18, 2024
Final Answer :
B
Explanation :
Statement I is true because indifference curves represent a ranking of preferences, not a measurement of utility. Therefore, the numerical labels attached to indifference curves are only meaningful in terms of the ranking they represent, not in an absolute sense.
Statement II is false because isoquants represent levels of output that can be produced using different combinations of inputs. The numerical labels attached to isoquants represent an absolute level of output, not just a ranking. Therefore, the numerical labels attached to isoquants are meaningful in a cardinal as well as an ordinal way.
Statement II is false because isoquants represent levels of output that can be produced using different combinations of inputs. The numerical labels attached to isoquants represent an absolute level of output, not just a ranking. Therefore, the numerical labels attached to isoquants are meaningful in a cardinal as well as an ordinal way.
Learning Objectives
- Pinpoint factors that denote upward, constant, or downward trends in production scalability.