Chapter 6 - Theory of Cost Flashcards
1
Q
Isoquants
A
a function representing all possible combinations of factor inputs (e.g. Capital = Machine and Labor) that can be used to produce a given level of output = Q
2
Q
Isoquants and Return-to-Scale
A
3
Q
Isocost line
A
a line showing the different combination of factor inputs which can be purchased with a given budget.
TC = PLL + PKK
4
Q
The slope of the isocost line
A
