What does the slope of an isoquant measure?
A)The price ratio of the two inputs.
B)The average product of labour.
C)The ratio of the marginal utility of the two inputs.
D)The rate at which inputs can be substituted for each other keeping total output constant.

Question

Quizplus · Accepted Answer

The slope of an isoquant measures the rate at which inputs can be substituted for each other while keeping output constant. This is because an isoquant represents all the different combinations of inputs that can produce the same level of output. Therefore, the slope of an isoquant reflects the relative marginal productivity of the inputs and their substitutability. Option A is incorrect because the slope of an isoquant is not directly related to the price ratio of the inputs. Option B is incorrect because the slope of an isoquant does not measure the average product of labor. Option C is incorrect because the slope of an isoquant is not related to the ratio of marginal utility of inputs.

What Does the Slope of an Isoquant Measure