30. A production function in which the inputs are perfectly substitutablewould have isoquants that are:Select correct option:Convex to the origin.L shaped.Linear.Concave to the origin
Question
- A production function in which the inputs are perfectly substitutablewould have isoquants that are:Select correct option:Convex to the origin.L shaped.Linear.Concave to the origin
Solution
The correct option is: Linear.
Here's why:
A production function with perfectly substitutable inputs means that one input can be completely replaced by another without affecting the level of output. In this case, the isoquants, which represent different combinations of inputs to produce a certain level of output, would be linear (straight lines). This is because the rate at which one input can substitute for another is constant along the isoquant.
On the other hand, if the inputs were not perfectly substitutable (i.e., the substitution of one input for another leads to a change in output), the isoquants would be either convex or L-shaped. Convex isoquants represent a decreasing rate of technical substitution (i.e., more and more of one input is needed to replace another input), while L-shaped isoquants represent a situation where inputs are perfect complements (i.e., they must be used together in fixed proportions).
Therefore, for perfectly substitutable inputs, the isoquants are linear.
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