Table of Contents
What are the different 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 is isoquant example?
An isoquant curve is a concave line plotted on a graph, showing all of the various combinations of two inputs that result in the same amount of output. Most typically, an isoquant shows combinations of capital and labor and the technological trade-off between the two.
Why can’t two isoquants cross?
Just as two indifference curves cannot cut each other, two isoquants also cannot cur each other. If they intersect each other, there would be a contradiction and we will get inconsistent results. Therefore, isoquants cannot intersect.
What are isoquants illustrate and explain the different types of returns to scale with the help of isoquants?
As we move along the expansion path, the distance between the successive isoquants diminishes; it is a case of increasing returns to scale. If the segments between two isoquants are of equal length, there are constant returns to scale. If labour and capital are doubled, the output would also be doubled.
What are the assumptions of Isoquants?
The assumptions of an isoquant curve are as follows: There are only two factor inputs, labour and capital, to produce a particular product. Capital, labour and goods are divisible in nature. Capital and labour are able to substitute each other up to a certain limit.
What are isoquants and Isocost line?
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 different types of return to scale?
There are three kinds of returns to scale: constant returns to scale (CRS), increasing returns to scale (IRS), and decreasing returns to scale (DRS). A constant returns to scale is when an increase in input results in a proportional increase in output.
How do I get to Mrtslk?
How to Calculate MRTS?
- K = Capital.
- L = Labor.
- MP = Marginal products of each input.
- (∆K÷∆L) = Amount of capital that can be reduced when labour is increased (typically by one unit)
What are Isoquants how do they relate input and output factors of production?
An isoquant represents all those factor combinations which are capable of producing the same level of output. Since an isoquant represents those combinations of inputs which will be capable of producing an equal quantity of output, the producer would be indifferent between them.