- Look At The Three Isocost Lines In Figure 2 8 Based On This Information What Can We Conclude Isocosts Mn And Fg Rep 1 (296.73 KiB) Viewed 22 times
- Look At The Three Isocost Lines In Figure 2 8 Based On This Information What Can We Conclude Isocosts Mn And Fg Rep 2 (296.73 KiB) Viewed 22 times
- Look At The Three Isocost Lines In Figure 2 8 Based On This Information What Can We Conclude Isocosts Mn And Fg Rep 3 (170.78 KiB) Viewed 22 times
"Look at the three isocost lines in Figure 2.8. Based on this information, what can we conclude?" Isocosts MN and FG represent the same price ratio (wage/price of coal) but different total costs of production. Isocost HJ represents a higher (wage/price of coal) ratio than isocost FG. Isocost HJ represents all points that can produce 100 metres of cloth at a particular price ratio. When the wage is £10 and the price of coal is £5, the combination of inputs at point N is more costly than the inputs at point B.
Question 4 (1 point) 10 9 8 7 Tonnes of coal 4 w 6 5 2 1 S 1 2 1700s (isocost FG) Steep isocost: relative price of labour to coal is high. A-technology now lower cost than the B-technology. We know this because B lies outside the line FG. 1600s (isocost HJ) • Firms use technology B. . At this relative price, no incentive to develop technology A. . We know this because A costs more (it lies outside the line HJ). H 7 8 9 10 11 12 13 B 3 4 5 6 Number of workers