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Labor on horizontal axis and capital on vertical axis

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Consider our standard model of an isocost curve with Labor on the horizontal axis and Capital on the vertical axis. Suppose that interest rates in the economic decrease. How would this impact a given isocost curve? Which one is right?

  • the isocost curve would shift inward in a parallel fashion.
  • The isocost curve would become steeper
  • The isocost curve would become flatter
  • The isocost curve would shift outward in a parallel fashion.

Reference no: EM131092714

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