Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 2

Explain how each of the following, other things being equal, would shift the isocost curve shown in Figure 5.9: (a) a decrease in the price of L, (b) a simultaneous and proportional increase in the prices of both K and L, and (c) an increase in the total outlay, or expenditure, from $120 to $150.