Answer to Question #232901 in Macroeconomics for shalu

Question

a)      The degree of convexity of an isoquant determines the degree of substitutability of factors of production. Do you agree? Explain.

Answer 1

Yes, I agree that the degree of convexity of an isoquant determines the degree of substitutability of factors of production,

An isoquant can be convex, linear, and L-shaped, it is convex when more units of a factor are sacrificed to add another factor of production, a linear isoquant appears in case of perfect substitutability of factors of production, and an L-shaped isoquant appears when the factors of production are complimentary to each other.