Isoquant, the Glossary
An isoquant (derived from quantity and the Greek word iso, meaning equal), in microeconomics, is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. The x and y axis on an isoquant represent two relevant inputs, which are usually a factor of production such as labour, capital, land, or organisation.[1]
Table of Contents
15 relations: Budget constraint, Conditional factor demands, Contour line, Derivative test, Expansion path, Factor price equalization, Indifference curve, Isocost, Marginal rate of technical substitution, Microeconomics, Production (economics), Production function, Rational choice theory, Returns to scale, Scarcity.
Budget constraint
In economics, a budget constraint represents all the combinations of goods and services that a consumer may purchase given current prices within their given income.
See Isoquant and Budget constraint
Conditional factor demands
In economics, a conditional factor demand is the cost-minimizing level of an input (factor of production) such as labor or capital, required to produce a given level of output, for given unit input costs (wage rate and cost of capital) of the input factors.
See Isoquant and Conditional factor demands
Contour line
A contour line (also isoline, isopleth, isoquant or isarithm) of a function of two variables is a curve along which the function has a constant value, so that the curve joins points of equal value.
Derivative test
In calculus, a derivative test uses the derivatives of a function to locate the critical points of a function and determine whether each point is a local maximum, a local minimum, or a saddle point.
See Isoquant and Derivative test
Expansion path
In economics, an expansion path (also called a scale lineJain, TR; Khanna OP (2008). Economics. VK Publications) is a path connecting optimal input combinations as the scale of production expands.
See Isoquant and Expansion path
Factor price equalization
Factor price equalization is an economic theory, by Paul A. Samuelson (1948), which states that the prices of identical factors of production, such as the wage rate or the rent of capital, will be equalized across countries as a result of international trade in commodities.
See Isoquant and Factor price equalization
Indifference curve
In economics, an indifference curve connects points on a graph representing different quantities of two goods, points between which a consumer is indifferent.
See Isoquant and Indifference curve
Isocost
In economics, an isocost line shows all combinations of inputs which cost the same total amount.
Marginal rate of technical substitution
In microeconomic theory, the marginal rate of technical substitution (MRTS)—or technical rate of substitution (TRS)—is the amount by which the quantity of one input has to be reduced (-\Delta x_2) when one extra unit of another input is used (\Delta x_1. Isoquant and marginal rate of technical substitution are production economics.
See Isoquant and Marginal rate of technical substitution
Microeconomics
Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.
See Isoquant and Microeconomics
Production (economics)
Production is the process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. Isoquant and Production (economics) are production economics.
See Isoquant and Production (economics)
Production function
In economics, a production function gives the technological relation between quantities of physical inputs and quantities of output of goods. Isoquant and production function are production economics.
See Isoquant and Production function
Rational choice theory
Rational choice theory refers to a set of guidelines that help understand economic and social behaviour.
See Isoquant and Rational choice theory
Returns to scale
In economics, the concept of returns to scale arises in the context of a firm's production function. Isoquant and returns to scale are production economics.
See Isoquant and Returns to scale
Scarcity
In economics, scarcity "refers to the basic fact of life that there exists only a finite amount of human and nonhuman resources which the best technical knowledge is capable of using to produce only limited maximum amounts of each economic good."Samuelson, P. Anthony., Samuelson, W. (1980).
References
[1] https://en.wikipedia.org/wiki/Isoquant
Also known as Isoquants.