1. Briefly describe what an Isoquant curve represents. If you were drawing an Isoquant curve, what would be listed as the labels on each axis?

1. Draw an Isocost curve with a budget of $8,000. The cost of input factor X1 is $200 per unit and the cost of input factor X2 is $400 per unit. If you cannot draw the Isocost curve, what would be the maximum amounts of each input that could be purchased?

X2

X1

1. How would your Isocost curve change (in Question B) if the budget shifted to $4,000 and input costs remain constant?

X2

X1

1. What would be the objective function of management when using the isoquant/isocost analysis. Briefly explain the optional conditions when using Isoquant and Isocost curves?