Assignment Solutions on Utilizing Isoquants and Isocosts
Firms strategically utilize factors of production (land, labor, capital and management) to maximize their output. That output can be communicated through an isoquant graph. Producers also understand the inputs needed for production must be purchased. That could be demonstrated through an isocost line. Utilizing your chosen commodity from Week 2’s “California Bounty” discussion post, select two inputs of production (don’t use land. It is overly costly and makes the creation of an isocost line challenging).
Paragraph 1: Discuss what an isoquant graph is and the information it demonstrates using your factors of production.
Paragraph 2: Discuss what an isocost line is and how it can be developed utilizing your selected factors of production as an example. Communicate what is happening at the “point of tangency” (where the isoquant graph and the isocost line touch). Previous week’s California Bounty: milk, yogurt dairy.