2 Draw isocost curves that are tangent to your isoquants in Exercise 1 and that each have the same slope. Mark the points of tangency and note the capital/labor ratio. Draw new, fl atter isocost curves that are tangent, again each having the same new slope. Mark the points of tangency and note the capital/labor ratio. In which case is the change in the capital/labor ratio greater? Which will have a higher elasticity of substitution?