Sunday, May 12, 2013

Production | Isoquant Exercise | Sketch the isoquants corresponding to the output levels




You are given the following table for a production process which has two variable outputs.

      LI
CI   1    2      3        4      5
1   35   60    70      85     95

2   60   70    85      95     105

3   70   80    95     105    115
4   85   95    105    115   125
5   95   105   115   125   135

CI = Capital Investment
LI = Labor Investment

Sketch the isoquants corresponding to the following output levels: 70, 85, 95, and 105.

1 comment:

  1. (CI,LI)
    Isoquant q=70 :(3,1) (2,2) (1,3)
    Isoquant q=85 : (4,1) (2,3) (1,4)
    Isoquant q=95 : (5,1) (4,2) (3,3) (2,4) (1,5)
    Isoquant q=105 : (5,2) (4,3) (3,4) (2,5)

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