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An isoquant identifies all of the combinations of two inputs that result in the same tota

An isoquant identifies all of the combinations of two inputs that result in the same tota

 An isoquant identifies all of the combinations of two inputs that result in the same total costs of production.

86) As the price of labor increases relative to the price of capital, the firm will move to a more labor-intensive production method to minimize costs.

87) If the inputs to a production process are perfect complements, the firm can choose from a virtually infinite array of combinations of the two inputs to minimize the costs of producing a given level of output.

88) If the inputs to a production process are perfect substitutes and the marginal rate of technical substitution is equal to the ratio of the prices of the two inputs, the firm can choose from a virtually infinite array of combinations of the two inputs to minimize the costs of producing a given level of output.

89) An improvement in technology would cause each of the isoquants in a firm's isoquant map to shift out away from the origin.

Abhinav 07-Dec-2019

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