Page 214 - DECO401_MICROECONOMIC_THEORY_ENGLISH

Unit-10: Isoquant Curve

5. The Isoquant curve is ....................... on its original point. Notes
(a) vertical (b) horizontal
(c) convex (d) down
6. Two Isoquant curves represent ....................... level of production.
(a) two units (b) one unit
(c) three units (d) four Units
7. In equilibrium point, the iso-cost line is ....................... to Isoquant curve.
(a) touching Point (b) original Point
(c) middle Point (d) upper Point
8. The diminishing returns to factor are due to ....................... of factor.
(a) losses (b) demerits
(c) profit (d) increment
But this is not possible because point K indicates 100 units of
Two Isoquant curves indicate two different production while point R indicates 200 units of production.
levels of production. If the curves intersect Thus S represents 100 and 200 units of production and this
each other, it means the cutting point will is technically wrong. So the intersect of Isoquant curve
represent the equal production which would represents absurd and contradictory status. So two Isoquant
be wrong from technical point of view.
curves will not intersect each other.
4. The higher the Isoquant curve higher will be the level of output: Higher are the isoquant curves from
each other, higher will be the production. It means that higher Isoquant curve is based on the higher
level of factors of production. This is represented in Fig. 10.6. In this figure, higher Isoquant curve IQ
1
indicates the higher production i.e. 200 units. And lower Isoquant curve IQ represents 100 units of
production. To produce higher represented IQ units (200) extra factors (OL + OK ) are used. While
1
1
1
to produce lower IQ units, the lower factors (OL + OK) are used. So the higher curve IQ indicates 200
1
units while lower curve IQ indicates the lower quantity i.e. 100 units.
Fig. 10.6

Y
IQ 1
IQ

Capital K K 1 A A 1

200
100
O X
L L
1
Labour

The slope of an Isoquant curve is substitution of factors.

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