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Consider the Following Statements When Answering This Question

Question 21

Multiple Choice

Consider the following statements when answering this question. I. With convex isoquants, a firm's expansion path cannot be negatively sloped.
II) If a firm uses only two factors of production, one of whose marginal product becomes negative when its use exceeds a certain level, then a cost-minimizing firm's expansion path will have vertical or horizontal segments.


A) I is true, and II is false.
B) I is false, and II is true.
C) Both I and II are true.
D) Both I and II are false.

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