What are isoquants and its properties?
An isoquant is a curve that shows all the combinations of inputs that yield the same level of output. Therefore, an isoquant represents a constant quantity of output. The isoquant curve is also known as an “Equal Product Curve” or “Production Indifference Curve” or Iso-Product Curve.”
What is isoquants and its types?
Linear Iso-quant Curve: This curve shows the perfect substitutability between the factors of production. Right Angle Iso-quant Curve: This is one of the types of iso-quant curves, where there is a strict complementarity with no substitution between the factors of production.
What are the three types of isoquants?
Useful Notes on 3 Most Important Types of Isoquant in Production
- Smooth and Convex Isoquant: In a two-product framework, when one of the factors of production can be continuously substituted by the other, we get a smooth and convex isoquant (figure 8.8).
- L-Shaped Isoquant:
- Linear Isoquant:
What are isoquants explain with diagram?
An isoquant map is a set of isoquants, each of which shows the maximum output that can be achieved for any set of inputs. An isoquant map is an alternative way of describing a production function, just as an indifference map is a way of describing a utility function.
What are the assumptions of Isoquants?
The main assumptions of Iso-quant curves are as follows:
- Two Factors of Production:
- Divisible Factor:
- Constant Technique:
- Possibility of Technical Substitution:
- Efficient Combinations:
- Iso-Product Curves Slope Downward from Left to Right:
- Isoquants are Convex to the Origin:
- Two Iso-Product Curves Never Cut Each Other:
Which one is not a property of Isoquants?
| Q. | Which is not a property of ISOQUANT? |
|---|---|
| B. | Convex |
| C. | Negative slope |
| D. | Positive slope |
| Answer» d. Positive slope |
What are the assumptions of isoquants?
What are the properties of indifference curves?
The four properties of indifference curves are: (1) indifference curves can never cross, (2) the farther out an indifference curve lies, the higher the utility it indicates, (3) indifference curves always slope downwards, and (4) indifference curves are convex.
What are the characteristics of isoquants?
Among the properties of isoquants:
- An isoquant slopes downward from left to right.
- The higher and more to the right an isoquant is on a graph, the higher the level of output it represents.
- Two isoquants can not intersect each other.
- An isoquant is convex to its origin point.
- An isoquant is oval-shaped.
Why must isoquants be thin?
4. Isoquants must be thin. The shape of isoquants (curvature) indicates how readily a firm can substitute between inputs in the production process. The slope of an isoquant shows the ability of a firm to replace one input with another (holding output constant).
What are the properties of isocost line?
The isocost line represents all combinations of capital and labor that have the same total cost. Therefore, any values of capital and labor that the firm can choose must satisfy the equation on the left that you previously derived. Then slope of the isocost line is W/r or the relative price of the inputs.
What are isoquants and Isocosts?
An isoquant shows all combination of factors that produce a certain output. An isocost show all combinations of factors that cost the same amount. Isocosts and isoquants can show the optimal combination of factors of production to produce the maximum output at minimum cost.
What are the properties of the isoquant curve?
The main properties of the isoquants are similar to those of indifference curves. These properties are now discussed in brief: This implies that the Isoquant is a negatively sloped curve.
Why are two isoquants cannot intersect each other?
Hence two isoquants cannot intersect each other. (iv) Isoquants are Convex to the Origin: This property implies that the marginal significance of one factor in terms of another factor diminishes along an ISO product curve. In other words, the isoquants are convex to the origin due to diminishing marginal rate of substitution.
Why are the isoquants convex to the origin?
(iv) Isoquants are Convex to the Origin: This property implies that the marginal significance of one factor in terms of another factor diminishes along an ISO product curve. In other words, the isoquants are convex to the origin due to diminishing marginal rate of substitution.
Why is the IP of an isoquant negatively sloped?
These properties are now discussed in brief: This implies that the Isoquant is a negatively sloped curve. This is because when the quantify of factor K (capital) is increased, the quantity of L (labor) must be reduced so as to keep the same level of output. The figure (12.3) depicts that an isoquant IP is negatively sloped curve.