CA Foundation P4 · Chapter 3 · Question 6 of 15
The slope of an isoquant measures the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Marginal rate of technical substitution between the factors
Explanation
An isoquant shows combinations of two inputs that produce the same output. Its slope is the MRTS of labour for capital, equal to MPL/MPK. The ratio of factor prices is the slope of the isocost line; MRS between goods is the slope of an indifference curve.
More Theory of Production and Cost MCQs
- Q8Which of the following is a fixed cost for a firm in the short run?
- Q9A firm's total fixed cost is Rs. 600. At an output of 50 units, its total variable cost is Rs. 1,400. Its average total cost at this…
- Q10Total cost of producing 10 units is Rs. 1,250 and of producing 11 units is Rs. 1,320. The marginal cost of the 11th unit is:
- Q11Which statement about the relationship between marginal cost (MC) and average cost (AC) is correct?
- Q12The long-run average cost curve is called an 'envelope curve' because: