Question

At a given cost level, a graph which shows combinations of labor and capital that can be used to produce is called:

• A. Indifference Curve
• B. Budget Line
• C. Isocost Curve
• D. Production Possibility Curve

Hint:

Isocost curves are analogous to budget lines in production theory.

Answer 1

The Correct Option is C

Step 1: Concept Definition: An isocost curve illustrates all possible combinations of inputs (labor and capital) that result in an equal total cost.

Step 2: Conclusion: Therefore, the Isocost Curve is the correct answer.