please respond the above questions
immediately now
What does isoquant/isocost & indifference curve and budget constraint analysis have in common? I know that they both 'look' similar & both strive to find the same things "consumers want utility" & "producers want eco profits" (maximising both).
What other things do they have in common? I'm kind of flat out.
Thank you.
Properties of the indifference curve and the isoquants are also the same i.e
(1)Two indiferece curve/isoquants can not cut each other.(2)Both are negatively sloped etc.
With respect to isoquants and indifference curves. both are negatively sloped, both are (almost always) concave, both are rank-ordered in that a "higher" curve represents MORE than a "lower" curve. Both show a constant relationship between two inputs or goods. That is, and indifference curve shows the possible mixes of good A and good B that will produce a given level of utility. An isoquant curve show the possible mixes of input A and input B that will, IF USED EFFICIENTLY, produce a given level of output. The indiffernce curve assumes the consume is a rational consumer, who tries to maximize utility, and has a utility function that has decreasing returns to scale. The isoquant assumes the producer is rational, and will maximize profits, and that the production function has decreasing returns to scale.
With respect to isocosts and budget constraints. They too are negatively sloped. They are generally linear. However, if they are not linear, they will be convex. They too can be rank-ordered.
Thats enough for now. However, one could write a 20 page paper on this question.
thx for that! it's definately what i had in mind. now to look in textbook and expand on it =)
what is the relationship between Isoquant and indiffernce curve
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