Question

The slope of isoquant is:

• A. Zero
• B. Constant
• C. Positive
• D. Negative

Hint:

Exam Tip:
Slope of Isoquant: Negative (indicating a trade-off between inputs).
Slope of Indifference Curve: Negative (indicating a trade-off between goods).
The MRTS is the absolute value of the slope of the isoquant.

Answer 1

The Correct Option is D

Step 1: Understanding the Concept:
This question tests the understanding of the slope of an isoquant and its economic interpretation.

Step 2: Defining the Slope of an Isoquant:
An isoquant represents combinations of two inputs (say, Labor \(L\) and Capital \(K\)) that yield the same output level \(Q\).
The slope of the isoquant is given by the Marginal Rate of Technical Substitution (MRTS).
\[ \text{MRTS} = \frac{dK}{dL} \] The MRTS measures the rate at which one input can be substituted for another while keeping output constant.

Step 3: Determining the Sign of the Slope:
To produce the same output level:
• If you increase the quantity of one input (e.g., Labor), you must decrease the quantity of the other input (e.g., Capital) to keep output constant.
• This implies an inverse relationship between the two inputs.
• As \(L\) increases, \(K\) decreases, so \(\frac{dK}{dL}\) is negative. Therefore, the slope of the isoquant is negative.

Step 4: Final Answer:
The slope of an isoquant is negative. Therefore, option (D) is correct.